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Beleaguered bank Northern Rock has named a consortium led by Sir Richard Branson's Virgin group as its preferred bidder to takeover the lender.

In a statement today Northern Rock confirmed the Virgin group of bidders was continuing discussions with the company and the UK's financial authorities and said the consortium was working on finalising its proposal for the bank "as soon as possible".

But Northern Rock did reveal under Virgin's indicative proposal, £11 billion of the cash borrowed by the lender from the Bank of England would be repaid to the central bank on the completion of a sale.

Northern Rock was forced to turn to the Bank of England for an emergency loan in September, having been unable to raise sufficient funds on the wholesale money markets due to a global credit crunch.

The move prompted the first run on a British bank in almost 150 years and forced the government to guarantee the savings of Northern Rock customers to restore confidence in the UK banking system in the wake of the damaging incident.

Additional borrowing by Northern Rock in the aftermath of the debacle has been accompanied by growing concerns over whether the troubled lender will be able to repay the cash.

But Northern Rock today stressed a Virgin takeover would provide the Bank of England with a "clear path towards repayment in full".

Under the acquisition proposals the damaged Northern Rock brand would be brought within the existing Virgin Money business and a fresh management team put in place – with Virgin Money chief executive Jayne-Anne Gadhia proposed to take the same role within the new company.

Northern Rock said the Virgin consortium had also signalled it had "no current intention" of cutting jobs at the lender and intended to continue to operate the business from its existing north-east base.

Commenting on the plans, Northern Rock chairman Bryan Sanderson said: "This is very good news for Northern Rock.

"I am grateful for the support we have had from customers and employees who have stayed loyal to us during these difficult times - and pleased a solution that firmly restores the company's prospects has been identified."

However Northern Rock stressed there could be "no certainty" the discussions with the Virgin consortium would lead to a sale of the business, with reports suggesting the lender's shareholders could yet block such a deal.

The bank revealed it had received a notice from some investors on Friday, calling for an extraordinary general meeting to discuss Northern Rock's future.

It said it did not consider such action "warranted or appropriate", confirming the request had been made by shareholders claiming to hold "not less than one-tenth" of the paid-up voting share capital of Northern Rock.

Reports suggest if Northern Rock investors were to block a sale, the company could be put into administration.