More than 12,000 Northern Rock customers with 125% mortgages have fallen behind with their repayments, figures showed yesterday.

The nationalised bank continued to issue the home loans for several months after hitting financial trouble in September 2007. It was given a £26bn bail-out by the Government.

The bank yesterday reported losses of more than £700m in the six months to the end of June. It said 12,100 borrowers with the controversial Together mortgage, which allowed buyers to borrow more than the value of their home, had fallen into arrears.

Daily Telegraph