Sir Richard Branson's Virgin Group is today reported to be considering a takeover move on crisis-hit Northern Rock. Shares rose 5p, or 2%, in early trading to 262p.

According to a newspaper report the gyms, phones and airline group is looking to take a controlling stake in the troubled bank with the backing of investors in the Middle East and the United States. A tie-up could see the mortgage lender's operations merged with the firm's Virgin Money business, which already offers mortgages, credit cards and insurance services.

Virgin is reported to have already met the Newcastle-based bank's management and is currently in talks with possible investors. Virgin is just one of a number of suitors said to be circling Northern Rock, which has seen its share price dive after it was forced to seek emergency funding from the Bank of England last month. The news sparked the first run on a UK bank for 150 years, as customers rushed to withdraw their funds to safeguard their savings.

Earlier this month, it emerged that New York-based private equity firm JC Flowers had raised £15 billion to bid for the bank, while private equity firm Cerberus is also understood to be interested in the firm's assets. Other names in the frame have included Blackstone and Apax, although no formal offers have yet been tabled. Banking giant Citi has also agreed to be on hand to lend Northern Rock some £10 billion to help ease its funding crisis.