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At the weekend, more than six months after Virgin Money's bid for Northern Rock was turned down, the Treasury revealed its adviser Goldman Sachs said a private takeover would have left the taxpayer footing up to £2bn whereas nationalisation would leave the taxpayer subsiding Northern Rock by between £450m and £1.28bn.

Daniel Lambert, press officer for the Treasury, said: "Obviously at the right time the government will return the bank to the market so we expect to get back the money we have put into it."

Scott Mowbray, head of public relations for Virgin Money, said he did not want to comment on the reports about the potential cost of Richard Branson's financial services provider's bid for the Newcastle-based lender as the company had put the rejection behind it and was concentrating on growing business.

He said despite plans last year to launch an intermediary-based mortgage business the lender now had broader ambitions to provide all aspects of financial services as a high street bank.

Mr Mowbray said mortgages and current accounts were the two remaining gaps that needed to be filled in Virgin's range of financial products and while he was unable to give any specific details or a timeframe he said the wheels were very much in motion in building the proposition.

He said: "Delivering a mortgage business is one thing but delivering a slightly bigger proposition in terms of becoming a bank that is something altogether different - a mortgage book will form part of that.

"The update really is that it is work in progress and we are working hard to deliver that."

Mr Mowbray said Virgin Money was focused on "getting it done right rather than getting it done quickly."

Brian Murphy, head of lending for independent intermediary The Mortgage Advice Bureau, said it was now elementary whether a private takeover of Northern Rock could have been more beneficial for the taxpayer or the overall economy.

He said: "We are where we are."

Mr Murphy said the Virgin brand was at the forefront of product development in all areas it engaged in so expected a banking proposition to be equally as innovative.

He said: "I am sure if they came into the high-street banking environment, if that is its intention, it would cause a few ripples among the other high street clearers."