NORTHERN Rock, which last year had queues of savers rushing to withdraw their money, today stopped taking new customers for some savings accounts because too many want to put money back in.

A significant inflow of retail deposits, particularly in recent days had led North-East-based Northern Rock to withdraw a number of savings products from new customers so it did not break its self-imposed rule not to take advantage of Government support.

But a leading North-East banking expert said it was the uncertainty over the stability of other banks that was leading customers to put their money into the Government backed institution.

Prof Rob Dixon, Dean of Durham University's Business School, believed that the rush to put money into Northern Rock would be causing liquidity problems for the banks savers were withdrawing the money from.

He said: "If people have taken money out to put it into Northern Rock then they will be feeling a liquidity pinch.

"The irony ultimately is that the Government's guarantee of a small part of the sector is having a major impact on the rest of the sector."

Prof Dixon said the rush of new depositers was absolutely because 100 per cent of savers' money was guaranteed, while for other banks it was limited to £35,000.

He said: "It certainly is a peculiar situation that Northern Rock collapsed because it couldn't get money in and now people are trying to bring it in as fast as possible because it is a guaranteed deposit.

"There are a significant number of people who are aware of a threat, they don't know what the threat is and may not know which banks will be subject to the threat so they are looking to reduce their risk.

"All of their money wouldn't go but if you have £100,000 you would be extremely worried about the other £65,000."

Northern Rock's self-imposed Competitive Framework, which ensures it does not exceed 1.5 per cent of UK retail deposit balances, is to prevent it taking unfair advantage during its temporary public ownership.

A Northern Rock spokeswoman said the inflow of deposits had been a split between new account holders and existing depositors.

She could not be sure it was because of the Government guarantee, but stressed that the bank did not use it to encourage depositors.

She added: "It may well be, that is not something we have checked on.

"We are keen not to promote the fact we have the 100 per cent guarantee. That is part of the competitive framework. Our staff are very aware of it, it is not something that our staff would use."

The savings products withdrawn for new customers are Silver Savings, Silver Savings 30, Business Reserve and a range of Fixed Rate Bonds Other savings products are still available from the bank.