Northern Rock was the biggest riser in the FTSE 100 index for UK blue-chip companies this morning after the stricken lender named a consortium led by Sir Richard Branson's Virgin Group as its preferred suitor.

Shares in Northern Rock surged 31% to 112.7p by 11:08 GMT today from Friday's 85.9p closing price, after the lender, which has received several expressions of interest in recent weeks, revealed its board has opted to pursue "accelerated discussions" with the Virgin consortium.