LONDON - A consortium led by Richard Branson's Virgin Group has been picked as the preferred bidder to rescue Northern Rock and plans to repay 11 billion pounds quickly to the Bank of England.

Northern Rock said the Virgin consortium had set out a clear path to repay fully loans to the Bank of England that are estimated to have reached 25 billion pounds since a crisis around the bank erupted in mid-September.

Virgin's consortium, which also includes buyout firm WL Ross, investment group Toscafund and Hong Kong-based investment group First Eastern, will inject 1.3 billion pounds of new cash into Northern Rock.

Half the cash will come from the consortium and half will be raised through a rights issue at 25 pence per share. The consortium will also inject Virgin Money, the Virgin financial services company, into the bank, with an implied valuation of 250 million pounds.

Northern Rock shares were down 14 percent at 73.8 pence on Monday at 8:08 a.m.

If the rights issue is fully taken up, the Virgin consortium will hold no more than 55 percent of the enlarged group.

Northern Rock said its board will continue to explore other options as part of its strategic review. Other suitors for the company included U.S. buyout firm J.C. Flowers.