Hopes of naming a winning bidder for Northern Rock by Christmas receded yesterday. The future of the bank, which owes £25bn to the Bank of England, is not likely to be decided until mid-January. Financial Times

Bryan Sanderson, chairman of Northern Rock, said yesterday the auction process was still on course and 'had not really accelerated or slowed down...it’s just things take time.' Earlier Sanderson told BBC Radio Newcastle that no action would be taken to resolve the bank’s plight 'this side of Christmas'.

He said: 'Ultimately, we have to make a recommendation on behalf of shareholders and on behalf of taxpayers – we owe every taxpayer just under £1,000 – and then on behalf of employees and produce the best that we can find.'

The auction is now a two-horse race between Olivant, the private equity group headed by Luqman Arnold, former Abbey chief executive, and a consortium led by Virgin Group.