Northern Rock has failed to persuade its leading shareholders to abandon demands for an emergency meeting and has only until Christmas Eve to fix a date for what could be an embarrassing face-off with investors.

Bryan Sanderson, the chairman of the troubled bank, has intervened personally in efforts to talk round RAB Capital and SRM Global, the two hedge funds that called the EGM, but had no success, people familiar with the talks said.

“They’ve been met with a ‘nyet’,” said one.

The emergency meeting, expected in mid-January, could give the hedge funds and 140,000 disgruntled private shareholders in the bank a highly visible platform to lambast the bank’s tardy sale process.

One Northern Rock insider said it would be “unhelpful” for the meeting to go ahead and they still hoped to persuade the funds to back down. But the deadline to send out documents for the EGM is next Monday.

RAB and SRM called jointly for the EGM after complaining that the bank was paying insufficient attention to shareholders, calling it a “shot across the bows” of the management.

The formal vote is a largely symbolic call to amend the articles of association to require a shareholder vote on any sale of more than 5 per cent of the assets. But Bradford & Bingley, the former building society, expressed interest last month in buying several billion pounds worth of Northern Rock’s mortgage book, a move that would require a vote if the EGM proposals went through.

Northern Rock shares were up 3.8p on Wednesday after Monaco-based SRM, run by Jon Wood, a former UBS trader, bought an extra 1m shares to raise its stake in the bank to 9.74 per cent. RAB’s Special Situations fund, run by Philip Richards, has a 6.66 per cent stake.

The future of Northern Rock is likely to be decided in January, with Olivant, the private equity group supported by the two hedge funds, vying for control with a consortium led by Virgin.

The bid process has been dragging on longer than expected as the bidders have struggled to secure bank financing to pay down part of the £26bn owed to the Bank of England.

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