NORTHERN Rock endured another disastrous day on the London stock market yesterday as its shares continued to tumble.

The mortgage bank, which became the first major UK casualty of the global credit crunch last week, saw its share price fall by more than 35 per cent by noon.

More than £1.32bn has been wiped off the Newcastle-based firm's stock market value since Friday, when news broke of the Bank of England's emergency financial support.

At noon yesterday, the company's share price had fallen to 283p, compared with 438p at close on Friday. It closed last night down down 155.25p at 282.75p.

Shares in the group are a fraction of the 1251p high at the beginning of the year.

Few stocks were safe from the fall-out at Northern Rock yesterday, with only a handful of blue-chips in positive territory.

Banks tumbled on London's benchmark index, with speculation over potential buyers for Northern Rock failing to lift the sector.

Former building society Alliance and Leicester saw shares plummet by 17 per cent on the FTSE 100 Index, while Bradford and Bingley stock dived more than eight per cent in the FTSE 250.

Investors rushed to sell their holdings amid concerns the lenders would suffer a similar fate to Northern Rock, despite reassurances from bosses over their funding lines.

Alliance and Leicester stressed it was ''business as usual'' yesterday, adding that, unlike Northern Rock, its funding model was not over-reliant on wholesale markets.

HSBC was the only major bank to see shares rise on Friday after rumours mooted it as a possible suitor, but the stock was down 0.5 per cent by mid-morning yesterday.

Shares in Halifax parent HBOS, another big player in the mortgage sector, Royal Bank of Scotland and Barclays were also down. They were not helped by reports suggesting their takeover target may be set to warn on profits.

But Northern Rock looked to maintain its lead at the top of the FTSE fallers, with coverage of savers queuing outside branches to withdraw money adding to the market troubles. It followed a warning on Friday that profits this year would be as much as £147m lower than expected.

Citigroup analysts said in a note that Northern Rock might struggle to find a buyer, despite being a cheap pick for possible acquirers.

"With an almost complete lack of earnings visibility beyond 2007, a damaged brand, a large balance sheet and a lack of synergies, we do not envisage a long queue of potential bidders," said Citigroup.

Competition issues are also likely to prevent many of its mortgage rivals snapping up the group, according to weekend press reports.