Northern Rock named director Andy Kuipers as chief executive officer in a long-awaited update on Thursday, but also said it would take a £281 million hit from its exposure to the credit crisis. Mr Kuipers replaces Adam Applegarth, who resigned last month after 24 years at the battered mortgage lender.

Northern Rock is being auctioned off by its advisers after it became Britain's highest profile casualty of the credit crisis, but the future of that process has been thrown into doubt in recent weeks, with several suitors withdrawing.

The bank said it remained in "accelerated" discussions with a bidding consortium led by Virgin Group and was engaged with other parties, including investment group Olivant, headed by former Abbey boss Luqman Arnold. It also confirmed it expects to complete its strategic review by February.

Olivant, however, which would keep Northern Rock as a going concern, is pressing for a swift resolution. It has written to Northern Rock threatening to withdraw from the rescue process unless a decision on the lender's fate is made by Christmas and unless it can get direct access to financing banks working with Northern Rock, a source familiar with the matter said.