12:54PM GMT 11 Dec 2012

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George Osborne, the Chancellor, told MPs that due to administrative errors made in 2008, loan agreements for around 152,000 Northern Rock borrowers are not wholly valid.

As a result, many customers could be in line for repayments of interest. The error will cost Northern Rock, which was state-owed at the time, an estimated £270 million or an average of £1,776 per borrower.

Most of the customers concerned borrowed less than £25,000, Mr Osborne told MPs. Those affected will be receiving letters from Northern Rock shortly, he said.

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