NORTH-EAST mortgage lender Northern Rock was last night forced to apply to the Bank of England for emergency financial support.

The Bank of England confirmed that it would help Northern Rock through its financial difficulties.

Although not unheard of, the move is unusual and will spark fresh concerns that the impact of financial market turmoil earlier in the summer is having a deeper impact on banks than previously thought.

A £4.4bn relief fund offered by the Bank of England was drained by the big banks in less than an hour yesterday as they struggled to secure finance.

The Bank of England supplied the extra cash in an attempt to ease soaring overnight inter-bank borrowing interest rates.

But the move did not help Northern Rock's share price, which fell five per cent by the close of business. Further falls are expected this morning.

According to a report in the Financial Times, Northern Rock is about to warn that its profit growth has been hit by the credit crunch.

The newspaper said that the lender would issue a trading update setting out the impact of the recent market turmoil on its business.

Ray Boulger, senior technical manager at mortgage broker John Charcol, said: "It is unusual. Banks will try to arrange things so they do not go to the lender of last resort. Clearly, Northern Rock has had difficulties raising money from their usual sources."

Justin Urquhart Stewart, of Seven Investment Management, said: "It is a short-term cash flow problem. It is unusual for for them to be in this position.

"This is the Bank of England saying, 'we support the banking system, but do not take this as an indication of us propping up investment banks'."

Treasury select committee chairman John McFall said: "I don't think customers of Northern Rock should be worried about their current accounts or mortgages.

"The fact that the bank is willing to act as lender of last resort should be reassuring, because it means they think the problems are temporary."

Northern Rock, one of the region's most important financial institutions, has became the latest victim of problems that began in the US sub-prime lending market.

The crisis began earlier in the summer when US finance companies became concerned about the number of defaults on repayments.