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

The broadcaster reported that Virgin would cut as many as a 1,000 jobs, bringing employee numbers down from 6,000 to around 5,000.

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.

Ms Ghadia, who would run Northern Rock if Virgin's bid was successful, is said to have revealed the Treasury would accept the cuts.

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.

According to today's report, the threats of job cuts at Northern Rock could prompt further backlash over the government's handling of the crisis at the bank.