New obstacles were thrown up today to a potential rescue takeover of Northern Rock as trustees of the stricken lender’s final salary pension scheme revealed a £100 million hole in the pension fund’s assets.

It came as Goldman Sachs, which is advising the Treasury, prepares a list of possible financial structures for a rescue. It is understood this includes a plan to convert some of the Rock's emergency borrowings from the Bank of England into bonds, which could be sold on to third party investors.

Separately, Northern Rock also announced that it will sell its portfolio of Lifetime equity release mortgages, which holds assets worth some £2.2 billion, or 2 per cent of Rock’s total asset base, to JP Morgan, the US investment bank.

Rock said that the proceeds of the sale, for a premium of 2.25 per cent or £50 million above the portfolio’s balance sheet value, would be used to pay down some of its borrowing of about £26 billion from the Bank.

The emergence of a substantial deficit on the pension fund confronts would-be bidders for Rock with the prospect of having to find additional capital to plug this funding gap.

It may also place the pension fund trustees in a more powerful role where they could exercise substantial sway over any agreement between Rock, the Government and potential bidders on clinching a rescue package.

News of the deficit emerged in a letter to Rock staff who are members of its final salary pension fund, in which the trustees announced a shift in investment strategy to protect contributors and existing pensionsers, as well as a revaluation of the fund’s assets using more conservative assumptions.

The trustees said that they had asked for the pension fund to be revalued on a more conservative basis to reflect “the significant deterioration in the financial position of Northern Rock, which necessarily implies a more pessimistic view of the company’s ability to support the scheme in future”.

The result was the emergence of the £100 million deficit in what is still a draft valuation that has to be “agreed and finalised in formal discussions with the company”.

It may also be discussed with the two potential bidders who are in talks with Rock, Olivant and Virgin, the letter added. “We will of course emphasise to them our concerns and seek from them a commitment to provide the additional funding that is required,” the trustees said.

The trustees made clear that, were a rescue to leave Rock in a more secure financial position, and they then felt able to revert to their previous more aggressive investment strategy, then the draft valuation would show “a substantially improved position, and perhaps even a small surplus”.

In the meantime, the trustees concerns about the security of the pension fund meant that they had decided to transfer assets out of equities and into government bonds. The letter indicated that about 93 per cent of the fund is now investment in gilt-edged securities, bonds and cash deposits, with the remainder in property and private equity investments.

Northern Rock said it was selling its mortgages as, although they had earned it net interest after costs of £34 million in the last financial year to June 2007, the heavy costs of its Bank loans, at a penal interest rate, meant that these returns would be heavily reduced once the extra funding costs were taken into account.

It said it would continue to sell its Lifetime mortgage products to equity release customers cashing in on the value of their homes, and to service existing loans, on behalf of the US banking group.

Andy Kuipers, the chief executive of Northern Rock, said: “This is a relatively small transaction, representing around 2 per cent of gross assets.

“But it is a positive development int he company’s ongoing strategic review. It illustrates the quality of our assets, which has enabled us to achieve a sale at a small premium despite continuing difficult financial markets, and will allow the company to reduce its debt to the Bank of England.”

Yesterday, Alistair Darling paved the way for a nationalisation of Northern Rock as he told the bank’s shareholders that he would not allow them to stand in his way if a private sector rescue could not be found.

The Chancellor said that a sale of the stricken bank was still his preferred option, but conceded for the first time that a sale may not be achieved by his self-imposed deadline of February 29.

“I want to find a private sector solution if that is at all possible. It may not be possible,” he told MPs on the Commons Treasury Committee. “We are reaching a stage where we have to come to a conclusion one way or another.”

His comments came as it emerged that the Financial Services Authority is planning to keep private the detail of its internal review into the Northern Rock debacle, publishing only its conclusion.

Hector Sants, the chief executive of the main City regulator, told The Times yesterday that some details would have to be held back to protect the legal rights of any FSA staff who might be criticised in the report and to respect the confidentiality of other banks mentioned for comparison purposes.

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