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Following the nationalisation of the bank in February, the northern lender has revealed it wants to progressively phase out all forms of public support within four years.

A full business plan, which will be submitted to HM Treasury for approval by the end of the month, is being put together to set out the bank's intentions.

These include reducing staff levels by a third by 2011 and reducing its asset base by half.

The plan is also to progressively repay the Bank of England loan and release government guarantees over the next three to four years.

Ron Sandler, executive chairman for Northern Rock said: "It will be a demanding plan, and one that will carry a number of financial and operational risks. Market conditions remain uncertain and a protracted downturn in the housing market would clearly present challenges to its achievement.

"But we are testing it carefully across a range of scenarios and are confident that we can produce a plan that will be delivered."