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Northern Rock's share price has slumped again, amid fresh concerns that the beleaguered bank could be sold at a heavy discount.

In early trading shares in the troubled lender were down by 17 per cent, dropping 30p to 149p by 08:40 BST.

The fall follows an unconfirmed report that two US hedge funds have been given permission by the Treasury to begin takeover talks with Northern Rock.

Yesterday the Sunday Telegraph claimed that JC Flowers and Cerberus had met with a Treasury official to discuss their separate plans for a possible deal.

However reports suggest that small shareholders are against a swift Northern Rock sale being agreed on the grounds that they could face further losses as a result.

Over the weekend the UK Shareholders' Association told the BBC that the government should not push Northern Rock into a "fire sale" and argued that the bank's shareholders should be protected against further losses.

By the end of Friday, shares in the Newcastle-based lender stood at 179.2p, more than 75 per cent below what they were worth when it emerged that Northern Rock had asked the Bank of England to provide it with emergency funding earlier this month.

The plea was made due to liquidity problems faced by Northern Rock in the wake of an ongoing global credit crunch, caused by rising default levels in the US sub-prime mortgage market.

Last week Northern Rock confirmed that it was in "preliminary discussions with selected parties" over its future.

"The company has received a number of approaches regarding a variety of potential transactions, including the possibility of an offer being made for the company although no price has been referred to," Northern Rock revealed.

Analysts say that Northern Rock's future as an independent company is considered to be untenable after the damaging run on the bank which occurred when it was confirmed that the Bank of England had agreed to act as its lender of last resort.