Northern Rock expects to repay almost £7 billion of its loan from the Bank of England by the end of 2008, the Government-owned bank has said.

The company's chief financial officer, Ann Godbehere, said Northern Rock expects to repay the loan in full by 2011, or shortly after, even if there is a recession.

Ms Godbehere said the bank's loan from the Bank of England stood at £26.9 billion at the start of the year and by March was down to £24.1 billion, while more has been repaid since.

She said at least 25 per cent of the loan should be repaid by the end of this year, and 75 per cent should be paid back by the end of 2009 and the remainder in 2010.

Ms Godbehere said: "Even under that recession scenario, the loan was repaid with only a short delay. The delay would only be about a six-month delay in that scenario."

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