Northern Rock given Christmas ultimatum

Pressure is growing on the Northern Rock board today after one of the two bidders for the bank threatened to pull out unless a takeover decision is made before Christmas.

Pressure is growing on the Northern Rock board today after one of the two bidders for the bank threatened to pull out unless a takeover decision is made before Christmas.

Olivant, which is now going head-to-head with Richard Branson's Virgin, has given the Rock's board until the end of this week to promise a final decision before December 25.

It also wants to talk directly to Citigroup and Deutsche Bank about getting a loan of up to £15m (€20.8m) to repay money paid in by taxpayers, and accused the Rock's board of blocking discussions.

Olivant, led by the former boss of Abbey National Luqman Arnold, is understood to have said unless it gets a response from Northern Rock on its two demands by the end of the week it would withdraw from the bidding.

It believes if the deal drags on until January or February more money will be withdrawn by customers and staff morale will deteriorate even further.

If Olivant pulled out, only the consortium by Sir Richard Branson and Virgin would remain, leaving many shareholders angry.

Acting Liberal Democrat Party leader Vince Cable attacked Branson in the British parliament yesterday, saying: "I don't want to run the man down. But it has now been pointed out that Mr Branson does have a criminal record for tax evasion.

"Therefore there is good reason to believe that the people who have to stump up the money for his consortium may well not regard him as a fit and proper person to run a public company - let alone a bank and let alone be responsible for £30bn (€41.6bn) of public money."

Northern Rock was unavailable for comment last night, but was reported to have been surprised by the ultimatum, as it felt it was co-operating with Olivant.

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