The management team publicised elements of its bid yesterday, outlining a plan which has many similarities to the size of the bank and its level of assets as it stood in 2003, before the business boomed. At that time, however, the company also had approximately half the number of employees, so job cuts of 2,400 could very well be in the pipeline. Paul Thompson – leader of the management team – could not rule out redundancies.

Of those who stand to be adversely affected by the fate of Northern Rock – its shareholders, employees, depositors and the taxpayer, who has footed its £28 billion loan – it seems that only the depositors and shareholders have retained the sympathy of the bidders and the Government.

Compared with the almost £16 billion of mortgages sold in the first half of 2007 before it was hit by the collapse of the credit market, the team hopes to reduce Northern Rock’s mortgage book to just £2-£3 billion a year. It hopes to do this by offering its existing customers uncompetitive rates when they come to remortgage at the end of fixed rate terms and direct them to another lender. To counteract this, the team will double the customer deposit base to £20 billion within three years, but was unspecific about how it would go about achieving this.

A statement from Northern Rock said: “The Board believes the Restructuring Proposal, once implemented in full, will result in an independent, well-capitalised, low cost and significantly lower risk mortgage and savings bank, with two distinct phases of development.”

Shareholders are on the side of a grass-roots takeover, with the team gaining the support of its two biggest stakeholders, RAB Capital and SRM Global, which hold a collective 18 per cent. Should its bid be successful, Virgin will have to work hard to win over shareholders if it wants a majority stake, as stated in its proposal.

Northern Rock’s in-house team are determined to see off the proposal made by Virgin, which intends to re-brand it with its own name, Virgin Bank. And Mr Thompson is concerned that this might give Virgin an edge. “I am worried,” Mr Thompson told Reuters in an interview on Wednesday. “I don’t want them making the wrong decision just because the perception is wrong,” he said.

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