Northern Rock is to get emergency financial support from the Bank of England, the BBC reported yesterday.

Northern Rock, which was Britain's biggest mortgage lender in the first half of this year, was not in danger of "going bust" according to the report. But it said the request for help would show the scale of its funding problems in the face of tightening credit markets.

The bank has been operating in the Republic for the last seven years and according to their accounts in July they had 24,500 saving customers here involving €2.4 billion. The average account is €97,000 and their business is concentrated on line.

Northern Rock has been the hardest hit UK lender as it relies on wholesale markets far more than competitors for its funding requirements.

The bank and The Bank of England declined to comment on the report.

The decision by the Bank of England to become the "lender of last resort" came after consultation with the Treasury and the Financial Services Authority, the BBC reported.

Rumours swirled earlier yesterday that Northern Rock was seeking emergency funding from the central bank, sending its shares down over 4 per cent.

"The company is aware of its obligations to inform the market if there is a material change in its circumstances," a spokesman for the Newcastle-based lender said, adding that its next scheduled trading update is due on October 1st.

Interbank lending costs rose to their highest level for nine years this week as banks scaled back short-term lending to each other.

Northern Rock gets about three-quarters of its funding from wholesale markets and a quarter from retail deposits, whereas rivals such as HBOS get about half their funds from retail deposits.

The BBC said in its report there was no reason for people with savings accounts at Northern Rock to panic. (Reporting by Steve Slater and Fiona Sheikh)