State-owned British bank Northern Rock will be sold before the end of the year, the Sunday Times newspaper reported.

The British government, which has pumped billions of pounds into troubled banks since the credit crunch erupted in late 2007, wants to retrieve some of its money, according to the weekly newspaper.

Northern Rock was taken into public ownership last year after it ran into severe funding problems because of the global squeeze on credit.

Advisers at Swiss bank Credit Suisse have begun drawing up a Northern Rock sale plan, the Sunday Times said.

The paper added that Northern Rock's most toxic or high-risk loans would be hived off into a so-called "bad bank" that the government would keep.

However, the remaining "good bank" assets could be worth about £2 billion ($2.9 billion), according to analysts' estimates.

The Treasury has already sounded out possible buyers including Virgin Money, National Australia Bank and Spanish group Santander, while private equity groups Blackstone and Towerbrook were also interested.

A Northern Rock spokesman said that no timetable had been set for any sale of the bank.