Northern Rock chief executive quits

Adam Applegarth has stepped down from the helm of the crisis-hit firm with immediate effect after 24 years with the business.

Mr Applegarth, who had intended to leave by next February, said: "It is time to hand over to management who I'm confident will be part of the company's future. I wish them and the board every success."

Northern Rock was thrown into crisis in September when it was forced to seek an emergency bailout from the Bank of England after soaring borrowing costs in the credit crunch.

The Newcastle-based lender is being propped up by an estimated £25 billion in taxpayers' money so far.

Mr Applegarth, who became chief executive of the group in March 2001 at the age of 39, was paid £1.36 million, including a £660,000 bonus last year.

Although Northern Rock refused to comment on the details of his pay-off, it said he will receive a settlement worth "substantially less" than if his contract was being ended under normal circumstances.

He will be paid in monthly instalments and the sum he does receive will be reduced if he gains a job with another company. The married father-of-two will be replaced by Andy Kuipers, who joined the board of Northern Rock in January 2005.

Mr Applegarth's departure comes as pressure is growing on the Northern Rock board after one of the two bidders for the bank threatened to pull out unless a takeover decision would be 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 to repay money paid in by taxpayers, and accused the Rock's board of blocking discussions.