Northern Rock has denied reports that it could cut up to 2,000 jobs due to a slump in trade at the troubled bank.
Press reports had suggested that the Newcastle-based mortgage lender had drawn up a business plan that could result in up to a third of its workforce being cut.
The Telegraph said "sources close to the situation" believe it is almost inevitable that Northern Rock will be forced to make redundancies.
But the lender insisted that it had no plans for compulsory job cuts.
Responding to the claims a Northern Rock spokesman said: "We refute today's unhelpful press speculation about job cuts."
He stressed that Northern Rock had confirmed its intention not to instigate compulsory redundancies "a number of times", but conceded that recruitment at the company had been frozen.
The spokesman added that over the course of time the lender expected "natural staff turnover" to take place.
Northern Rock's denial that it is planning job losses come after a difficult period for the lender, which was last month forced to seek emergency cash from the Bank of England as a result of liquidity problems caused by the ongoing global credit crunch.
The move prompted the first run on a British bank in almost 150 years, as Northern Rock customers rushed to withdraw their cash from the bank in the wake of the revelation.
Meanwhile shares in Northern Rock dipped in early trading this morning, with traders attributing the fall to fears that a sale of the troubled company could take longer to complete than originally hoped.
US private equity firm JC Flowers and a consortium led by Sir Richard Branson's Virgin group have both indicated that they are considering tabling official bids for Northern Rock.
However the Financial Times reported this morning that Northern Rock's advisers had indicated that JC Flowers' proposal was "not as developed as it might have been" in terms of financing.
In a separate development it has also been reported that private equity group Cerberus is interested in launching its own bid for Northern Rock.
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