As a result it is likely to be offered an equity stake, possibly by the bidder offering it warrants.
Under the proposed structure, Northern Rock would sell a pool of its assets to a financing vehicle, which would fund the purchase through bonds sold on to private investors and backed by government guarantees.
The deal will need to comply with European Union rules on state aid for private companies and the government has until March 17 to come up with a full solution to go before the European Commission.
Treasury officials said this meant a final decision on the bank's fate would come swiftly after its own February 4 deadline for bidders.
Northern Rock is estimated to owe the Bank of England about 24 billion pounds since seeking emergency funds in mid-September after being unable to raise cash in financial markets.
News of the emergency loans prompted the first run on the deposits of a major British bank for over 140 years and kick-started the auction for the lender.
"This is a perfectly good solution to the Northern Rock problem, but may have significant further ramifications for other lending institutions," said Simon Maughan, analyst at MF Global, referring to other lenders who may want to issue bonds but are not backed by a government guarantee.
He said the financing was good news for shareholders as rescue proposals such as Virgin's can be sweetened, based on the prospect of cheaper borrowing costs for Northern Rock, feeding through to higher profitability.
Responding to press reports that Virgin might improve its bid, Branson said on a business trip to India that he had submitted a fair offer, but its terms could still be tweaked.
Olivant said it expected to submit a proposal by the February 4 deadline.
Savers withdrawing cash from Northern Rock contributed to record savings inflows to Britain's building societies last year. They attracted 16.1 billion pounds, almost double the level the year before, the industry said.
Brown came under fresh criticism of his handling of the crisis over the weekend when opposition politicians said Virgin had a favoured relationship, after Branson accompanied Brown on a business trip to China and India.
The Northern Rock crisis contributed to a slump in Brown's poll ratings at the end of last year. A poll last month put the Conservatives 12 points ahead of Labour.
