Northern Rock revamp due

The new boss of Northern Rock is putting the final touches on his business plan for the troubled bank, aiming to repay billions of pounds to the government and satisfy European regulators.

Ron Sandler, the trouble shooter running Northern Rock after it was taken under state control last month, is set to outline plans to drastically scale back mortgage lending and try to lure new retail savings, but keep it attractive for a future buyer.

The threat to the bank's 6,000 jobs, increasing scrutiny of the government's finances, a slowing housing market and competition from rivals for deposits makes Mr Sandler's business model a sensitive issue.

Details of the strategy are expected this week, after the Treasury submits the business plan to the European Commission by yesterday's deadline.

Despite being engulfed in a five-month crisis, Northern Rock could be in a position to repay almost all its loan to the Bank of England by early next year, according to analysis this week by Simon Ward, economist at fund manager New Star.