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Northern Rock shares experienced a fresh fall today, amid growing concerns about the future of the troubled lender.

Speculation has been mounting that a bid could be made for the bank at a rock bottom price, while some reports suggest that rival lenders and private equity firms that might be interested in taking over Northern Rock could face difficulty in raising the necessary funds for an offer.

Meanwhile the company’s market position seems to have been undermined further by the government's announcement today that it will not guarantee new accounts opened with Northern Rock.

The Treasury made the announcement in a statement outlining the limits of its pledge, made earlier this week, to guarantee savings held at the troubled bank.

It said that it would guarantee arrangements for existing deposits held with Northern Rock as at midnight yesterday.

The department also confirmed that the guarantee will cover Northern Rock accounts re-opened in the future by customers who closed them between September 13th and September 19th.

But the Treasury added: "Since it would otherwise be unfair to other banks and building societies, the arrangements would not cover any new accounts set up after September 19th."

"The guarantee in relation to Northern Rock Plc will remain in place during the current instability in the financial markets," the department stressed.

Chancellor Alistair Darling announced on Monday that the government would guarantee all deposits held with Northern Rock, after customers queued for hours to withdraw their savings from the troubled bank last Friday and Saturday.

It is thought that more than £2 billion was withdrawn from Britain's fifth-largest mortgage lender after it requested emergency cash from the Bank of England last week.

The lender was granted the emergency funds due to cash-flow problems resulting from a global credit squeeze. Amid rising default levels in the US sub-prime mortgage market banks have become more reluctant to lend money to one another on the wholesale market, given uncertainty about the extent to which they are exposed to bad debts in the sector.

Yesterday Standard & Poor's downgraded its long-term rating for Northern Rock and said that its outlook for the bank was negative.

"The downgrade of the long-term rating reflects Northern Rock's diminished business position as a result of its recent liquidity stress," explained Standard & Poor's credit analyst Richard Barnes.

"Since it will be extremely difficult for Northern Rock to rebuild its franchise, we expect that it will effectively begin to wind down in an orderly manner if it is not acquired in the near future," he added.