Northern Rock's entire board offered to resign as the liquidity crisis that forced to mortgage lender to borrow £13 billion from the Bank of England gathered pace, it has emerged today.

The mass offer of resignation from Northern Rock's management was detailed as the lender faced a grilling by the cross-party Treasury Select Committee after the Bank was last month forced to throw it an emergency lifeline.

The emergence of the bailout sparked an unprecedented run on Northern Rock as panicked investor withdrew an estimated £2 billion.

Sir Ian Gibson, Northern Rock's senior independent director, said today: "In the days of the run, from the chief executive to the chairman, everybody said they would be willing to resign.

“I consulted with brokers, shareholders and the overwhelming feedback was ’you can worry about that later, what you need to do now is direct the bank through a crisis, and when the crisis has passed, that’s the time to think about the make-up of the board.’”

Sir Ian said board members first signalled that they were prepared to resign at a meeting on August 30, as concern mounted over the bank's ability to fund itself in the wholesale market.

Northern Rock's chairman, Dr Matt Ridley, admitted that he has offered to resign from the embattled bank and will leave when "it is in the interests of the company".

It emerged today that Northern Rock has so far borrowed £13 billion from the Bank of England, but Dr Ridley declined to state how much the lender expects to withdraw in the future.

Answering a question on why he had remained at Northern Rock, Dr Ridley said: "I have made it clear to the senior independent director that my resignation is available to him as soon as he thinks it is in the interests of the company." He added that he is "working day and night" to resolve the bank's problems.

Both Dr Ridley and Adam Applegarth, chief executive at Northern Rock, repeatedly argued that the problems that hit Northern Rock were not "foreseeable".

Mr Applegarth said that Financial Services Authority, the City watchdog, had stress-tested the bank, but only to see if Northern Rock could withstand a 40 per cent decline in house prices and not a sudden reduction in access to the wholesale lending market from where Northern Rock derives 75 per cent of its funding or a credit crunch.

He also defended a much-criticised decision to pay out £60 million in interim dividends - which has now been abandoned - arguing that at the time Northern Rock had excess capital. Mr Applegarth said that the problems in the global financial markets were connected to credit not capital.

The chief executive also defended Northern Rock's policy of granting mortgages up to 5.9 times an individual's salary, branding it as "prudent" and arguing that people applying for home loans at this rate are "heavily credit checked."

JC Flowers, a US private equity fund, and a Virgin Group-led consortium are both now considering bidding for Northern Rock. Shares in Northern Rock fell by 1.99 per cent to 211.7p.

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