Another dramatic slump in the price of Northern Rock shares suggests that the market believes the cash-starved bank could be taken over for around £3 a share.

Northern Rock (NRK) shares are currently changing hands for 294.625p, down 143.375p in busy trading with over 100 million moving within an hour and a half of the market opening.

Chief executive Adam Applegarth was not prepared to discuss the possibilities of talks regarding a takeover of the bank with the BBC in a Radio 4 interview this morning, neither was he prepared to reveal how much has been withdrawn from the bank since Friday.

There have been unconfirmed reports that Lloyds TSB was close to taking over the bank, but prospects of the deal evaporated because of the difficulty of raising cash with the current global liquidity crisis.

Anyone taking over Northern Rock would be concerned about the risks of refinancing its loans in the current market.

Broker Keefe, Bruyette & Woods has valued the bank at 475p a share, somewhere between its net asset and run-off values, but no buyer would pay that much.

It is estimated that Northern Rock has lost £2 billion in deposits since Thursday, about 8% of the total, less than the Bank of England had feared.

As well as increasing the opening hours of some of its branches, Northern Rock has increased the bandwith on its on-line banking so that its web site can be accessed by more customers.