A break-up of Northern Rock is under consideration after the troubled bank confirmed several potential takeover offers. It could be sold in parts or as a whole, but analysts believe a deal would be difficult to structure.

Spanish entrepreneur Jose Maria Ruiz-Mateos, famous for marketing Harveys Bristol sherry, is among those interested in making an offer, according to newspaper reports. He is well known in Spain for being a former member of the cult Opus Dei and being imprisoned in the 1980s for smuggling, fraud and tax embezzlement although the charges were dropped a decade later.

'(Ruiz-Mateos') holding company, Nuevo Rumasa, should manage the cash for the equity value of Northern Rock, but one has to wonder how he plans on financing a balance sheet with £113 billion in assets,' said Hichens Harrison analyst Magnus Mathewson.

Collins Stewart analyst Alex Potter said a move by a rival bank for Northern Rock seemed unlikely after the mortgage lender said yesterday that no price had been referred to any discussions with potential suitors. He believes a private equity takeover would 'seem the more likely option today'.

Shares in Northern Rock have fallen more than seven-fold this year. Rival banks are likely to prey on this equity weakness by waiting for further falls before making an offer.

Northern Rock's latest update followed its announcement that it will not pay shareholders an interim dividend payment it promised in July.

The bank had come under increasing criticism over the payment, worth an estimated £59 million, after the Bank of England stepped in as a lender of last resort less than two weeks ago.

The Newcastle-based group said it felt it would not be appropriate to make any dividend payment until it could make a full announcement "regarding the outcome of discussions with other parties and the development of the business model".

Conservative MP Michael Fallon, a member of the Treasury Select Committee, confirmed that Northern Rock will face the Committee next month. Chief executive Adam Applegarth and chairman Matt Ridley will be forced to account for their actions in public.