UK hedge fund manager RAB Capital, one of the largest shareholders in troubled UK mortgage lender Northern Rock, said it would back a management-led restructuring of the bank now its preferred bidder Olivant has pulled out.

A spokesman for RAB Capital said: "We have always said we wanted a strong and independent Northern Rock. In the current circumstances there is only one independent solution available, in the shape of the proposal from the Northern Rock management team led by Paul Thompson. They should assume they have our support."