Financial experts say debts could be up to pounds 30bn; Northern Rock Rescue campaign strengthened by move.

THE extent of Northern Rock's debts was the subject of renewed speculation yesterday with some reports claiming the figure could be as high as pounds 30bn.

Financial experts have been working on the basis that the Gosforth-based bank has pounds 18bn of liabilities, but now the figure is believed to be rather higher.

The teams behind bid interest at private equity houses JC Flowers and Cerberus are said to have been shocked at the scale of Northern Rock's liabilities.

The exact scale of Northern Rock's problems will be influential in determining its future, with potential suitors - whether private equity or otherwise - given pause for thought if its debt is indeed as large as reported. However neither party has yet had full access to the bank's books, having only examined a limited amount of financial data.

Another potentially influential issue in any takeover deal is the political background. With Prime Minister Gordon Brown having now decided not to call a general election, pressure from Whitehall to get a deal agreed quickly to reassure the electorate might well cool.

As well as The Journal leading opposition to a cut price sell of Northern Rock, hedge fund RAB Capital - the holder of a 6% stake, the UK Shareholders' Association, and the Northern Rock Foundation, have all raised worries about the prospect of any bid which they feel undervalues the bank.