NATIONALISED lender Northern Rock yesterday pledged up to £10m to sponsor Newcastle United for the next four years, in a deal that was condemned as an unjustifiable use of public money.

The contract – valued at between £1.5m and a potential £10m – will see the bank remain the main sponsor of the Championship team, following a long-standing relationship dating back to 2004.

Newcastle-based Northern Rock, which was nationalised in 2008, said it believed the sponsorship contract fitted in with its responsibilities under Government ownership, and claimed it remained “mindful” of its public funding.

But last night, the lender was accused of being out of touch for saying the sponsorship was an acceptable use of taxpayers’ contributions.

It will also be a further blow to shareholders, many of whom lost tens of thousands of pounds in the collapse of Northern Rock, which sparked the first run on a UK bank in more than a century.

Susie Squire, campaign manager for the Taxpayers’ Alliance, told The Northern Echo: “I think taxpayers will be pretty angry to hear about this contract, which seems an unjustifiable use of public money.

“This is a fully nationalised bank, and the taxpayers were asked to ride to the rescue to keep its head above water, not for it to sponsor a football team.

“I think this shows Northern Rock is out of touch with what most people are thinking, and seems a very bad decision.”

Northern Rock – the so-called good part of the bank, which was separated from the more toxic division, Northern Rock Asset Management, earlier this year – said it will only pay out the maximum £10m if Newcastle, currently top of the Championship, play in the Premier League for the full four years.

The contract, which commences at the start of next season, is also subject to review after two years, added the bank.

Northern Rock has also maintained its sponsorship of the Newcastle Falcons rugby and Newcastle Eagles basketball teams since nationalisation, although these and all other sponsorships are under review.

Gary Hoffman, chief executive of Northern Rock, said the deal with Newcastle United is an important link with the community.

‘‘We remain mindful of our responsibilities under Government ownership and only consider those advertising and promotion channels that deliver a high return on investment and good strategic fit,” he said.

“The new contract will help keep the Northern Rock brand in the public eye and reinforces our strong roots in the North-East region, a community we are immensely proud to support.”

UK Financial Investments, the Government body which looks after Stateowned bank assets, said it was not involved in the decision to renew the club’s sponsorship.