The Coventry Building Society today gave a clear indication it was interested in buying Northern Rock.

In a statement the UK's third largest building society, which almost doubled its profits last year, said: "Coventry Building Society’s commitment to mutuality has helped deliver consistently superior financial performance and member value throughout the financial crisis.     "The Board believes that these credentials would benefit Northern Rock customers if it were to be remutualised as part of Coventry Building Society."

It added that once the Government had confirmed the process and timetable for a sale the Coventry's board, "Will examine the criteria laid down and decide the next steps to take."     "At this stage we cannot rule anything out," it added.

A Northern Rock spokesman said the Newcastle based bank would not comment on speculation.

Northern Rock, which has its headquarters in Gosforth, has 74 branches across the UK, of which 21 are in the North-East.

Earlier this month, Northern Rock revealed losses of £232.4m in its first full year of trading since its split.

At that time executive chairman Ron Sandler said he did not believe it necessary for Northern Rock to be profitable before it was sold, although it should be moving in that direction.

The bank has appointed Deutsche Bank to examine options, which could include a sale, mutualisation or a stock market flotation.