Banker's Northern Rock salvage plan

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Luqman Arnold - regarded as one of the City's most experienced bankers - is preparing a proposal that does not involve the sale or break-up of the Newcastle-based business.

Mr Arnold will use a heavyweight team of banking experts to work alongside existing management in an attempt to save the ailing bank.

The team - drawn from Mr Arnold's financial services investment business, Olivant - will take a minority stake in Northern Rock.

He is best known for joining Abbey after the UK's fifth-biggest bank dived into the red five years ago. He stabilised its performance before the business was sold to Spanish bank Santander.

Details of his proposals are expected to be finalised ahead of this Friday's deadline set by Northern Rock's advisers for bids to be submitted.

So far a consortium led by Sir Richard Branson's Virgin Group and private equity firms Cerberus and JC Flowers have expressed an interest in Northern Rock, which turned to the Bank of England for emergency funding when the crisis in US sub-prime mortgage lending caused money markets to dry up.

Olivant is expected to argue that Northern Rock's plight does not allow enough time for a protracted takeover process. It said today that its proposal involved the immediate introduction of a core team of Olivant's "experienced principals".

Other than Mr Arnold, key members are thought to include Alan Morgan, a former senior partner at management consulting firm McKinsey, and Brian Keane, a former investment banker with Deutsche Bank. Prior to working at Abbey, Mr Arnold led Swiss investment bank UBS Warburg.

He is now chairman of Olivant, which is based in Knightsbridge and aims to invest in financial services businesses in Europe, the Middle East and Asia.