Brussels has expressed serious reservations about the restructuring package put forward by the British government to save Northern Rock, the stricken mortgage lender, including fears that state aid could drag on for too long.

The European Commission’s first assessment of the plan, set out in the European Union’s official journal, says it “doubts whether the size and duration of this down-sizing are sufficient to avoid undue distortions...[or] that... a deeper and more rapid downsizing could not be implemented”.