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The European Commission (EC) is investigating the restructuring plan for Northern Rock that could see it stay as a nationalised institution until at least 2011.

The EC said it had received a detailed restructuring plan from for Northern Rock but was asking for additional information as well as for third party comment on the state rescue.

Competition commissioner Neelie Kroes, said: "The Commission needs to open a formal investigation into UK measures to restructure Northern Rock to ensure legal certainty, notably in view of the large scale of the aid measures, the background of current conditions in financial markets and the risks of distortion of competition.

"I look forward to continuing to work closely with the UK authorities and other parties during our investigation."

The EU needs to give third parties one month to submit their comments on the rescue package and the investigation is expected to take up to 5 months to complete.

The UK government brought the bank into temporary nationalisation in February after a search for a private buyer failed.

Since the run on the bank in September, it has borrowed around £24bn from the Bank of England but under the restructuring plan aims to pay this back by 2010.

Whether the government’s rescue package for the bank is legal, however, still remains the subject of great debate.