Northern Rock rebels lose key votes

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Investors failed to back in sufficient numbers three of the four resolutions put forward by its two biggest shareholders.

The successful resolution limits the board's ability to issue shares, although Northern Rock said this did not represent an "additional material restriction" to a rescue.

The four proposals put forward by hedge funds SRM Global and RAB Capital restricted the board's ability to issue shares and sell assets.

Northern Rock's board had warned the proposals could hinder a rescue of the ailing firm, which is set to be nationalised by the Government if a private sector rescue fails.

The four resolutions put forward by SRM and RAB - which together hold 18% of the company - all gained support from around 66% of shareholders.

The successful resolution needed the backing of a simple majority although the other three required 75% support.

Northern Rock chairman Bryan Sanderson said the board would work "tirelessly" to find a solution to the group's current difficulties but acknowledged the support that the rebel motions had attracted.

He said: "Whilst we are pleased that all but one of the resolutions proposed by SRM and RAB Capital were not carried, we recognise that a material number of shareholders did vote in favour of these resolutions.

"Shareholders should be assured that the board will continue to work towards securing the best possible outcome for shareholders and other stakeholders."