A guarantee put in place to protect customers of ailing banking group Northern Rock has been extended to cover all new deposits. Shares in the company surged 20% on the news and were trading at 208p this afternoon in London.
The British Treasury said the new agreement would give the company breathing space as it continues to pursue 'the full range of its strategic options'.
Northern Rock will pay an 'appropriate fee' for the extension of the government guarantee to ensure that it does not receive a commercial advantage.
Northern, which is in discussions with possible bidders, said in a statement: 'Accordingly, all retail savings - for both existing and new depositors - remain guaranteed, safe and secure.'