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Northern Rock, the bank which triggered the financial crisis in Britain, could be sold before the general election in the biggest shake-up of the banking system for years.
Regulators today approved a plan for it to be split into a "good bank" to be sold and a "bad bank" to remain under government control. Tesco and Sir Richard Branson's Virgin Money are among companies said to be interested in a deal. It could fetch £1.5billion.
The Government is keen for a sale before the election, expected in May next year, to recoup money for the taxpayer.
Royal Bank of Scotland, 70 per cent owned by the taxpayer, and Lloyds Banking Group, 43 per cent state controlled, also look likely to be ordered to sell part of their businesses.
Ministers are determined to see more competition in the market following the financial crisis, which greatly reduced the number of independent banks and building societies.
The "good bank" will hold customer savings and safer mortgages and will be forced to lend. The "bad bank" will hold riskier mortgages and assets.
