Northern Rock rescue could cost Virgin £200m

Richard Branson’s Virgin Group may be forced to pay as much as £200m (€268m) to the Government if it succeeds in rescuing Northern Rock, a report said today.

The Government is understood to be pushing for a better deal for the taxpayer under Virgin’s offer as the group hammers out the final details ahead of tomorrow’s reported deadline for revised proposals.

It is thought that the Government is hoping to secure between £100m (€134m) and £200m (€268m) for the taxpayer if Northern Rock is revived within three years, according to the Financial Times.

Virgin’s bid is still thought to be in pole position for the troubled bank after the Government reportedly told Northern Rock’s management that their “self-help” proposal did not come up to scratch.