SRM Global Master Fund Partnership, one of Northern Rock's biggest shareholders, said yesterday it would ask the authorities to make the bank reveal to investors details of bid proposals it has received.
SRM's founder, Jon Wood, said: "We are approaching the Takeover Panel to clarify with them what should and shouldn't be shown to shareholders. If there are bids for this company, we should see them."
Northern Rock's shares were repeatedly suspended yesterday as they plunged by up to 42 per cent. The sell-off came as investors reacted to the Chancellor's comments the day before that he would "veto" any bid for the bank that was not acceptable to the Government.
The bank's shares recovered most of the losses to end the day down 7 per cent at 97p – the first time they have closed below £1. Investors who thought the bank was oversold helped the shares to recover, and some hedge funds may have used the slump to bolster their positions.
JC Flowers, the private investment firm, put in its proposal to the bank yesterday. The bid proposes paying shareholders a "nominal" price, injecting just over £1bn of equity and repaying £15bn of loans to the Bank of England using debt. JC Flowers wants to buy the whole business, retain the Northern Rock brand for mortgages and run it as a going concern.
Mr Wood said that if Northern Rock needed £1bn of equity, existing shareholders would be happy to support the company, and called for Luqman Arnold, the former head of AbbeyNational, to be installed as the chief executive.
Mr Arnold's Olivant investment firm has proposed buying up to 20 per cent of new Northern Rock shares and running the business as a going concern, with Mr Arnold as temporary chief executive.
"As we have said repeatedly, we see no reason at all to sell this company or parts of its book in these credit-constrained times," Mr Wood said.
Proposals received so far are not formal bids, and give indications of the price shareholders would get, but no firm offer. The bank said on Monday that all proposals it had received were "materially below" Friday's closing share price of 132.6p.
Cerberus, the US private equity firm, was last night said to be still interested in buying Northern Rock after submitting a proposal on Friday.
Northern Rock is said to have received up to 10 proposals from potential bidders. Other parties who have expressed an interest include Sir Richard Branson's Virgin Money.