Billionaire Richard Branson, banker Luqman Arnold and an in-house management team are set to pitch formal offers for Northern Rock on Monday, the government's deadline for bids.
Branson has said his Virgin Group will make an offer for the troubled bank ahead of the February 4 deadline, while Arnold's investment group Olivant and the in-house team have also said they will bid.
The government, which wants a private sector buyer, will then have to decide which is the best option for the bank's future as well as for British taxpayers.
It is not clear how long the government will take to make a decision, which could rest with Prime Minister Gordon Brown.
Northern Rock was loaned 25 billion pounds by the Bank of England in September after the onset of the global credit crisis caused its business model to collapse.
The government is guaranteeing that amount of financing will be available to all bidders, meaning the bank's fortunes will be tied to the state for several years.
The Sunday Times newspaper reported that bidders have been told they will have to accept a warrant that allows the government to share in future profit growth. Northern Rock was not immediately available for comment on the report.
The winning bidder will also be expected to carry out a low-risk strategy for the group. Rival banks will be watching for any unfair advantage that could be gained from the government backing, for example if Northern Rock raised money from capital markets while still benefiting from the cash.
