The conversion of Northern Rock's £25 billion Bank of England debt into government guaranteed bonds has been backed by the Chancellor, Alistair Darling after gaining approval from the Prime Minister, Gordon Brown.
If the plans are passed by both the Financial Services Authority (FSA) and the European Commission (EC), the debt will be wrapped up by investment banking firm Goldman Sachs who initially proposed the solution.
This decision follows last week's shareholder meeting which saw investors trying to regain control in the wake of further nationalisation talks.
Bids from Olivant and the Virgin Group are still on the table, with reports indicating that Richard Branson is moving to enhance his consortium's offer.
The end is not yet in sight though, as if the sale still cannot be agreed then the government will resort back to 'plan B' and continue its plans for nationalisation.
Northern Rock's shares have already rocketed by just over 42 per cent as a result of the announcement to sit at 92p.
