Mumbai: Investment bank Citigroup has offered to provide funding to potential buyers of Northern Rock even as advisors of the ailing British bank are in talks with US buyout firms JC Flowers and Cerberus over a rescue bid, sources familiar with the developments said.

Citigroup was appointed as an advisor to Northern Rock in order to provide financing to potential suitors, the sources said, adding that Northern Rock was also working with other banks to provide similar lines of finance.

Newspaper reports, meanwhile, said Citigroup would offer funding of "significantly more than 5 billion pounds" and possibly double that amount, to show that Northern Rock can still raise funds.

The funding is likely to be available at a similar rate to what other banks are refinancing at in the market, it said.

News that financing is becoming more available, coupled with interest from more than one potential suitor, lifted Northern Rock''s shares more than 10 per cent over a 12 per cent rebound yesterday.

By 0825 GMT Northern Rock shares were up 8.7 per cent at 165 pence, having touched 169p. The shares have rebounded from a record low of 112p on Tuesday, but are still down over 75 per cent in the past month, valuing the bank at about 700 million pounds ($1.4 billion).

The Bank of England has offered Northern Rock emergency funding since September 14, amidst a credit market crunch. The mortgage lender is estimated to have drawn about 8 billion pounds on the facility, at a penal interest rate.

JC Flowers, founded by former Goldman Sachs banker Chris Flowers, has secured more than 15 billion pounds ($30.6 billion) in funding that could be used in a takeover of the UK lender, one of the sources said, largely to refinance loans.

Flowers is currently doing due diligence work, a process set to take "weeks" as pressure increases from all sides for a quick solution to stem losses and damage at the bank, the source said, adding funding arrangements were contingent on that work.

Sources said private equity firm Cerberus was also still interested, though it could aim to break up Northern Rocks, UK''s fifth-largest mortgage lender.