The banks said it would select out unsecured loans, leaving many borrowers with no choice but to seek financing at other institutions when their current deals expire.

Northern Rock would continue to offer prime loans, The Times of London reported.

The bank is trying to repay a $50 billion Bank of England emergency loan that it accepted in September. It is hoping to pay the loan back in three or four years, the paper said.

Staff reductions would occur over the next three years, the bank said, but the union, Unite, said it would accept only voluntary staff reductions.