SAVERS investing their money with Northern Rock will no longer have it 100 per cent guaranteed by the Government, it was announced yesterday.

The Government issued the guarantee in September 2007 as savers queued around the block to get their money out, fearing they could lose it if the bank collapsed.

But with the institution now on a firmer footing, from May 24 customers will revert to the same level of protection offered to UK savers at all other banks and building societies, where the first £50,000 is insured by the Government.

Existing fixed-term accounts will retain the guarantee for the remaining term of the product.

Yesterday’s move was seen as another milestone in the eventual sale of Northern Rock, following its split into two institutions on January 1.

A savings and mortgage bank called Northern Rock plc – effectively the “good”

part of the bank – was spun off and will be sold into the private sector.

Its more toxic loans have been retained in the existing bank, renamed Northern Rock Asset Management, which is likely to remain in public ownership.