LONDON (Reuters) - Britain's biggest buy-to-let lender Bradford & Bingley (B&B) denied a report it was considering a bid for part of troubled lender Northern Rock.

The BBC said B&B had approached Northern Rock about certain assets, sending shares in the beleaguered bank up over 5 percent in early trade on Wednesday.

"Contrary to reports, Bradford & Bingley is not actively pursuing a bid for any part of Northern Rock," a B&B spokeswoman said, though she said B&B was one of several parties which had received a copy of the Northern Rock briefing memorandum.

Northern Rock declined to comment.

A source familiar with the matter told Reuters B&B was one of a group of interested parties which had looked at Northern Rock's assets, in particular its mortgage book, in the early part of the auction process.

Northern Rock is being sold off, but the process has been thrown into doubt in recent weeks as suitors hit funding troubles.

The two remaining suitors are investment group Olivant, led by former Abbey boss Luqman Arnold, and Richard Branson's Virgin. Should a deal with either of those two fail, the bank could face nationalisation or a wind-down and breakup, in which case its assets would be sold to rivals such as B&B.

The Financial Services Authority has warned banks interested in buying mortgage books to consider whether they should be exchanging cash for illiquid assets in times of turmoil. B&B, however, said last month it had funding through to the end of next year and was "padded up for a long haul".

Northern Rock shares were up 2.7 percent at just over 90p by 9 a.m., while Bradford & Bingley shares rose 1.5 percent.