Northern Rock abandoned plans last night to pay a £60 million dividend to shareholders but revealed that it was in takeover discussions with several potential bidders.

The beleaguered bank said that it was cancelling the planned 14.2p-a-share interim dividend due next month. In a statement to the London Stock Exchange, Northern Rock said that it had received “a number of approaches regarding a variety of potential transactions, including the possibility of an offer being made for the company”. However, it emphasised that no bid price had been discussed. It said: “The board believes that it would not be appropriate to make any interim dividend payment until it can make a full announcement regarding the outcome of discussions with other parties and the development of the business model.”

One approach was made by José María Ruiz-Mateos, a Spanish businessman who, with compatriots, wanted to buy a controlling stake in Northern Rock, it emerged. However, Mr Ruiz-Mateos was convicted of a criminal offence in 2005 and it is understood that the Northern Rock board is more hopeful of a deal from an anonymous potential bidder.

Shares in Rock fell 9p to 163p yesterday before the announcement. Barclays emerged as a 5 per cent shareholder but the shares were held mostly on behalf of individual clients rather than on its own books.

Before the U-turn last night Northern Rock was set on pushing ahead with the dividend, which was announced on July 25 with its interim results. MPs on the Treasury Select Committee had attacked the decision to pay out cash to shareholders while taxpayers’ money was being used to provide emergency liquidity to the bank. Northern Rock has drawn on £3 billion of the lender-of-last-resort facility provided by the Bank.

RAB Capital, the hedge fund group with a 6 per cent stake in Northern Rock, criticised the decision to cancel the dividend. “We disagree with the decision,” the asset manager said. “Frankly, we’re tempted to agree with the analysis by some in the press that the Bank and the Treasury would like to see Northern Rock shareholders wiped out.” However, other shareholders are thought to be more sympathetic. Before the cancellation last night the Association of British Insurers, which represents big institutional investors, said that the decision to pay was up to the board, but that it should consider all factors, including how paying out the dividend might reduce the value of the company.

Mr Ruiz-Mateos wrote to Northern Rock last Friday, saying that he represented Spanish investors who would be interested in acquiring a controlling stake in the bank. Other than an acknowledgement of its letter, Nueva Rumasa, Mr Ruiz-Mateos’s company, has had no further communication with Northern Rock.

Nuevo Rumasa paid €188 million (£132 million) in May for the Spanish operations of Parmalat, the Italian food company that almost collapsed in 2003 after the uncovering of accounting fraud.

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