Rock still in dark on Goldman blueprint for future

The investment bank delivered its report to the Treasury last week, and Northern Rock expected to see it on Monday - ahead of yesterday's extraordinary general meeting in Newcastle.

But chairman Bryan Sanderson said he was still in the dark over what Goldman was proposing. "I expected to see the Goldman Sachs report 48 hours ago but I still haven't seen it," he said.

A successful rescue bid by Sir Richard Branson's Virgin Group or Luqman Arnold's Olivant rests on Goldman raising enough finance to fund a deal. In particular, a buyer needs to repay immediately a significant portion of the £26 billion Northern Rock has borrowed from the Bank of England. Sanderson also needs to see the Goldman numbers to assess whether a standalone option is viable.

The fact that Goldman has still not delivered its report to Northern Rock suggests it could be struggling to find enough backing even after trawling around sovereign wealth funds.

Goldman has, however, discussed its proposals with the Treasury, Bank of England and Financial Services Authority, providing further evidence that the Northern Rock board is playing second fiddle to the tripartite authorities in the hunt for a saviour.

Gordon Brown gave his strongest indication yet that the Government may nationalise the bank, saying it is one of the options being considered as others run out.

"There are a number of companies in the financial private sector that have expressed interest but public ownership - later to move it back into the private sector - is one of the options," he said.

The Government has lined up Ron Sandler, a senior banker and former adviser to the Prime Minister, to take over as chairman if Northern Rock is nationalised and a decision could come within days.

But Sanderson said he was confident ministers would wait until the middle of February before making a decision. "I'm still reasonably confident of a private-sector solution," he said. "Nationalisation is looming up rather more than a few weeks ago but my contacts with the tripartite authorities suggest Government still prefers a private-sector solution."

The comments came after Sanderson fought off plans by rebel shareholders SRM Global and RAB Capital to limit the board's powers to sell parts of the business. The hedge funds, which together own 18% of the company, said the proposals would prevent assets being sold off on the cheap.

Only one of the four resolutions got through, although the other three gained significant backing in a partial victory for the rebels.

WHAT WILL HAPPEN NEXT?

The vote by Northern Rock shareholders to reject proposals put forward by SRM Global and RAB Capital to limit the board's powers has little bearing on the outcome at the mortgage lender.

A private sale to Virgin or Olivant remains the preferred option for the Government, the Northern Rock board and its shareholders, including SRM and RAB but a standalone option is also being considered. However, much depends on whether Goldman Sachs can come up with adequate funding to support one of the three options.

If it fails to do so, the Government may have little choice but to nationalise the bank. Although Northern Rock has imposed a deadline of mid-February to find a solution, ministers may jump the gun and make that decision in days.