Northern Rock jobs threatened

Virgin Group would cut jobs at Northern Rock if it ended up taking over the bank, the BBC has claimed.

The BBC reported that Virgin would cut as many as a 1000 jobs, bringing employee numbers down from 6000 to around 5000.

Richard Branson had previously claimed that there would be no redundancies if Virgin were successful in a taking over the troubled mortgage lender.

However, the promises have been abandoned due to government-backed bonds having to be repaid within three years.

Virgin Money boss Jayne-Anne Ghadia told the BBC that job losses would be greater than originally anticipated.

The BBC quoted Ms Ghadia, who would run Northern Rock if Virgin's bid was successful, as saying the Treasury would accept the cuts.

The investment firm Olivant recently pulled out of the race to secure the Newcastle firm, while Virgin and an in-house management team both pitched their rescue bids this week.

The government is believed to favour a private-sector solution.

The BBC claims threats of job cuts at Northern Rock could prompt further backlash over the government's handling of the crisis at the bank.