Northern Rock is considering a possible break-up of the bank in a move designed to widen the appeal of its auction process and attract new bidders. Financial Times, The Times, Daily Telegraph, The Independent

Dubai International Capital said yesterday that it could take as long as six months to conclude a rescue of Northern Rock and signalled it was possible that no deal would materialise for the stricken British mortgage bank.

Advisers to Northern Rock are likely to knock on the door of Lloyds TSB again to try to entice the high street bank into buying the stricken Newcastle-based lender.

The move is being driven by the Government, which is more enthusiastic about seeing Northern Rock sold to a bank than to private equity.

Northern Rock signalled yesterday that it had additional options in resolving its fate as it confirmed that Blackstone, the private equity firm, had been hired as an adviser.

The stricken mortgage lender said Blackstone would be involved in all aspects of its strategic review, including securing future funding. Blackstone joins Merrill Lynch, Northern Rock's long-time broker, and Citigroup as an adviser.