Northern Rock will formally acknowledge receipt of up to ten bidders today as the Treasury wrangles with Brussels about a possible indefinite extension of emergency support to the stricken bank.

The Newcastle-based group is expected to post a statement detailing receipt of proposals from companies including Sir Richard Branson’s Virgin Group and JC Flowers, the private equity firm. The bids are likely to price the bank lower than its present market value.

Hedge fund shareholders in Northern Rock are set to table a proposal to put the sale on ice and install instead a management team led by Luqman Ar-nold, former chief executive of Abbey National.

In an attempt to hasten the sale, The Treasury is talking to Brussels about bypassing EU state aid rules by reclassifying the Bank of England’s emergency aid as “restructuring aid”. That would allow the Bank to provide indefinite funding to Northern Rock, making it easier for bidders grappling with how to refinance the business’s borrowings.

European Union state aid rules prevent the bank from receiving the existing emergency funding past February. A Commission spokesman said that any such aid would need to comply with strict conditions, including evidence of a plan that restored the bank’s long-term viability within a reasonable timescale.

The rules could also force a successful bidder to divest of certain assets or reduce Northern Rock’s market presence. The move to get round the rules – which would effectively see British taxpayers propping up the stricken bank for months to come – is likely to meet strong opposition from some Members of Parliament. A government statement on Northern Rock is due this this week.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive