Northern Rock chief could walk off with £380,000 payment

Under the terms of his contract, Adam Applegarth is entitled to six months' salary even if he resigns of his own volition.

Bryan Sanderson, the stricken lender's chairman, has insisted there "will be no pay-off" but the company admitted yesterday that Mr Applegarth might get his basic pay for the six-month notice period.

"At most he will get the contractual minimum," said a company spokesman.

"There will be no bonus, no special severance package, no pension top-up."

Mr Applegarth is still working for Northern Rock although it was not clear last night for how long.

He is legally entitled to six months' pay from the date of his resignation on November 16.

Sources close to the company said, however, there was ' virtually no chance' he would get any payment after he departs.

He will walk away with a pension pot worth £2.2million.

Last year Mr Applegarth earned a total package of £1.4million, including basic pay of £690,000 and a bonus of £660,000.

He is based at the Rock's headquarters in Gosforth, a leafy suburb of Newcastle.

Mr Applegarth had agreed to stay on until the end of January while the company conducts an auction process.

He could leave sooner if the mortgage lender's future is secured.

Shares in the Rock fell 0.7p to 84.1p yesterday, another all-time low. Shareholders are shunning the bank and financial institutions are still refusing to lend it cash, forcing it to borrow even more from the Bank of England.

The Rock's taxpayer loan swelled by an estimated £ 1.1billion in the past week alone.

Weekly figures from the Bank of England indicate that its total lending is close to £26billion.

Rivals say Northern Rock depositors are continuing to knock on their doors as they try to move their savings elsewhere.

The spiralling debt to the Bank of England suggests the Newcastle lender's financial position is deteriorating by the day, adding to pressure on Chancellor Alistair Darling to engineer a quick rescue.

Richard Lambert, of the Confederation of British Industry, warned yesterday that the fiasco is damaging the reputation of the City abroad.

Nationwide chief executive Graham Beale also claimed the Government's handling of the disaster had damaged the entire financial community.

"The film footage of queues outside Northern Rock transmitted throughout the world did not do the UK any good," he said.

Nationwide attracted £ 1.8billion of customer savings in September, showing its success at attracting disillusioned Rock customers.

The figure was £460million in each of the previous five months.

Northern Rock continues to talk to interested bidders, but hopes that it could finalise a shortlist by today appear too optimistic.

Bankers expect to spend the whole weekend sifting through the various proposals.