Citigroup and other banks are to consider providing financing lines of up to £25bn to Northern Rock after the government said its cast-iron guarantee to protect depositors would be extended to new savers of the embattled bank.

Yesterday, the Treasury announced that the guarantee hastily put in place last month to protect retail savers would now cover all new deposits made after September 19. That could attract new customers and make its savings business more attractive to any bidder.