Adam Applegarth today resigned as chief executive of Northern Rock, the Newcastle-based bank hit by the credit crisis.

He will remain with the group until it settles on a buyer or obtains funding to remain independent — a process due for completion no later than the end of January.

The bank also announced that Sir Derek Wanless, Nichola Pease, Adam Fenwick and Rosemary Radcliffe will step down from the board as non-executive directors.

In their stead, John Devaney, the chairman of National Air Traffic Services, and Simon Laffin, an adviser to CVC Capital Partners and a previous chief financial officer of Safeway, join Northern Rock as non-executive directors.

Mr Applegarth's resignation follows the departure on October 19 of Matt Ridley, the bank's chairman.

Bryan Sanderson, the new Northern Rock chairman, said in a statement: “Adam's participation in the next phase of the strategic review is important, not least due to his extensive knowledge of the business and his ability to lead the process during this difficult period.”

Sir Ian Gibson, Northern Rock's senior independent director, told the Treasury Select Committee last month that the bank's board had offered him their resignations, should shareholders demand their departure.

News of Mr Applegarth's exit came as Virgin Group issued a statement giving further details of its bid for the troubled bank.

Virgin said that Sir Brian Pitman, the former chairman of Lloyds TSB, would chair Northern Rock if it bought the bank. Virgin said that it intended to repay a "significant proportion" of Northern Rock's loan from the Bank of England immediately.

The Virgin statement said: "A clear timeline is envisaged for full repayment of of the borrowings and the release of Her Majesty's Treasury."

Separately, Olivant, the fund founded by Abbey National's former chief executive Luqman Arnold, said it is submitting a proposal to the Northern Rock Board offering an alternative to a distressed sale of the business.

Olivant is proposing to take a minority stake in Northern Rock. It said in a statement that it “entails taking urgent steps to re-establish Northern Rock as a viable business, retaining its brand and restoring it to financial health.”

Times Recommends

• London rallies after US rescue of Fannie and Freddie
• Green gives warning of 'double dip'
• ‘Winter of discontent’ looms amid strike action