Northern Rock's future is still far from certain, despite a bid from a consortium led by Richard Branson's Virgin group.

The group has been confirmed as the preferred bidder, but needs to put together a final offer that will satisfy all parties.

Not only does it require the backing of the mortgage bank's board and shareholders, but it must also get the green light from the Treasury and fellow "tripartite authorities" the Bank of England and the Financial Services Authority.

Virgin's deal will see £1.3 billion of funds injected into the group in return for a controlling stake, with plans to pay back £11 billion of the estimated £25 billion Bank of England loan immediately. The Northern Rock name would also go as part of the proposals, with the bank rebranded under the Virgin banner.

The consortium is offering investors 25p for each share, which values Northern Rock at around £105.3 million - less than a third of the lender's market value.

Once it has the final bid approved, the team then has to put the deal to investors - a significant hurdle for any of the suitors, given the increasing unrest among shareholders.

Investors have seen shares slump from a high of more than £12 in February to less than £1 in recent weeks and fear being left with little on sale of the bank.

Other suitors in the running include former Abbey chief Luqman Arnold's Olivant group, which had been seen as the shareholder favourite, and US buyout group JC Flowers.

A deadline for a deal to be sorted is looming, with the European Union's state aid rules surrounding Northern Rock's Bank of England loans set to cut off rescue aid after six months.

This would give all parties until February to secure Northern Rock's financial future.

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