Northern Rock has urged Olivant, the private equity group interested in making a bid for the embattled bank, to come up with a fully-financed business plan. Financial Times, The Times, Daily Telegraph, Independent

Olivant, led by Luqman Arnold, the former chief executive of Abbey National, proposes to inject new management into Northern Rock and run the bank as a going concern.

Arnold’s plans have won the support of leading shareholders, notably Jon Wood’s SRM hedge fund, which wants Northern Rock’s board to look at other suitors in addition to Virgin.

Virgin’s bid plans for Northern Rock came under more pressure yesterday as SRM Global, took its stake in the stricken mortgage bank to more than 9%.

Virgin plans to grow Northern Rock’s savings book to £30bn over three years as part of its ambitious plan to repay taxpayers’ money.

It intends to spend about £50m a year on advertising and marketing to achieve such growth, sources said.

Meetings held in Newcastle and London by the Northern Rock Shareholder Action Group voted against Sir Richard Branson's proposal and NRSAG will now draw up a campaign to inform investors about what it believes are the shortcomings of the Virgin deal.