GOLDMAN SACHS is close to completing a £15 billion financing package for use by bidders trying to rescue Northern Rock, the stricken mortgage lender.

The financing arrangements, which could be unveiled as soon as this week, will put pressure on other advisers working on the rescue – in particular Citigroup, which last year said it would provide the necessary finance.

The Goldman deal is understood to be on better terms, and probably sufficient to break the impasse over a bid.

Investment firm Olivant and a consortium led by Sir Richard Branson’s Virgin Group have presented offers to rescue Northern Rock. Both are confident they can raise funds from lenders to repay part of the £26 billion the Bank of England has provided in emergency funds.

However, a deal has been hampered by the complicated terms of any financial package. The Treasury is likely to block any plans for commercial loans to use the best-quality assets as collateral as this would make Northern Rock’s outstanding debts to the government less secure.

Goldman, which is advising the Treasury, the Financial Services Authority and the Bank of England, was called in to try to break the funding deadlock before Christmas. The move came after Blackstone, Northern Rock’s adviser, had failed to put acceptable finance in place.

Any financial package must also be able to meet tough EU rules on restructuring aid.

Olivant wants to parachute in new management, inject £800m via a £650m rights issue and £150m of its own money in return for a 15% stake. It would immediately pay back £15 billion to the Treasury against £11 billion under Virgin’s plan.

Virgin proposes injecting £1.3 billion partly through a deeply discounted rights issue, which would give it majority control of Northern Rock.

Northern Rock’s board is set to come under immense pressure at the emergency meeting.

Hedge funds RAB Capital and SRM Global, which together own more than 17% of the shares, have tabled resolutions that would block the board from selling assets of 5% or more without investor approval, buying assets worth more than 20% of the value of the company and stop it issuing new shares above certain thresholds.

Late last week the hedge funds sent separate letters, both seen by The Sunday Times, to other shareholders urging them to vote through the resolutions.

SRM’s Jon Wood told The Sunday Times: “It is our strong belief that voting these through is in the best interest of the company and will ensure it is in the strongest possible negotiating position.”

SRM and RAB are concerned the company is vulnerable to an obscure clause in the UK listing rules. The so-called 10.8.1 clause allows directors of a company in “severe financial difficulties” to ignore the normal rules on shareholder rights.

Northern Rock’s board, led by chairman Bryan Sanderson, has attacked the resolutions claiming they could hold up a sale and derail a rescue deal.

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