RICHARD Branson’s bid to buy Northern Rock has moved a step closer with Chinese investors now poised to back the move.

The tycoon, pictured, is busy assembling a list of investors before his firm Virgin Money makes the Government an offer for the state-owned Newcastle-based bank.

He is understood to be talking to China Investment Corporation (CIC) about adding to the £500m that US tycoon Wilbur Ross has pledged to support his bid. US private equity firms Carlyle and General Atlantic Partners, and the Universities Superannuation Scheme are also understood to be prepared to back Branson.

Virgin has declined to comment and the amount that CIC may put in is unclear although the investor has assets of £127bn available should it decide to throw its weight behind a bid likely to be around £1bn.

CIC already invests in Blackstone Group, Morgan Stanley, Visa and GDF Suez, among others. Its potential interest in UK banking represents a significant fillip for the beleaguered sector. It would also be the first large investment by the Chinese in UK high street banking.

Earlier this month CIC was also linked with a rival bid for Northern Rock from JC Flowers, which is the only other of the bidders in the running for the bank to have been named.

Virgin Money declined to comment.

The sale was announced by the Chancellor George Osborne in the summer. It comes as a number of major UK banks are in the process of selling branch networks after rulings by the European Commission. Lloyds is selling 632 branches, to a network known as Verde.

RBS has already agreed a sale of 300 of its branches and their customers’ business to Santander.

Virgin Money currently deals only in insurance and credit cards and if it buys Northern Rock it will have a full banking offer and a network of 70 branches.