THE powerful American financial services group GMAC, half-owned by the car giant General Motors, is to spearhead a rescue bid for Britain’s stricken mortgage bank Northern Rock.

GMAC is to play a pivotal role in the bid being put together by Cerberus, the secretive New York private-equity house.

Cerberus, which owns a controlling 51% stake in GMAC, is one of three bidders now doing due diligence on Northern Rock’s books, alongside Virgin and JC Flowers.

Up to now GMAC’s involvement in the Cerberus proposal has been kept under wraps.

GMAC certainly has the fire-power to help finance the deal. At the end of its last financial year the group held more than $287 billion (£140 billion) in assets and earned net income of $2.1 billion on net revenue of $18.2 billion.

The business was formed 88 years ago to finance car dealer-ships, but it has since evolved into a bank, insurance company and lender for tens of billions of dollars’ worth of car, home and college loans.

Cerberus, which has built a reputation for buying distressed assets, bought its stake in GMAC last year for $14 billion.

It has since sold some of the equity to powerful hedge funds, including Gabriel Capital, Seneca Capital and Durham Asset Management. They also have a seat on GMAC’s board and are keen to grow the business and make it less dependent on General Motors.

GMAC’s involvement in the Cerberus bid will provide additional credibility and present it as a trade buyer as opposed to a financial one, something the Treasury is keen to encourage.

Meanwhile, the bid being proposed by Sir Richard Branson’s Virgin has moved a step forward. Last week it held due diligence talks with its partners, which include the hedge fund Tosca and AIG, the American insurance giant. About 30 people took part and this number included members of govern-ment-owned Dubai International Capital, which is close to signing up as another equity partner.

Private-equity group JC Flowers is also pressing ahead with its bid plans. It already has about £15 billion in funding in place and last week assembled a heavy-weight team to lead Northern Rock if it succeeds in buying the bank. Paul Myners, former Marks & Spencer chairman, will be chairman, while Richard Pym, who stood down as boss of Alliance & Leicester in July, will be chief executive to stabilise Northern Rock before becoming deputy chairman.

JC Flowers, which held further meetings with Northern Rock’s management last week, is said to believe it could secure government loans on commercial terms as part of its rescue deal.

However, Alistair Darling, the chancellor, has indicated there is a limit to the Bank of England’s funding, which has hit £20 billion. He has set Northern Rock’s management a February deadline to come up with proposals about its future.

Pressure is also growing for reforms of the tripartite regime, where regulation is split between the Bank, the Financial Services Authority (FSA) and the Treasury. Michael Fallon, a Conservative MP and member of the Treasury select committee, has called for regulation of individual banks to be stripped from the FSA and passed to the Bank.

“Everyone agrees the tripartite system is confused,” he said.

“A bank like Northern Rock has to file monthly liquidity reports to both the Bank and the FSA. That tells you all you need to know – the system is plainly confused and a mess.”

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