By Steve Slater

LONDON (Reuters) - Virgin Group, controlled by entrepreneur Richard Branson, is in talks to take over Northern Rock, a person familiar with the matter said on Friday.

The planes, trains and mobile phones group could lead a consortium including Middle East and U.S. investors that would inject cash in exchange for a controlling stake and stabilise funding at the troubled bank, rather than make a formal takeover offer, the source said.

The group could make a proposal as early as today, but the timing was uncertain, he added.

Under the plan the Northern Rock business would be kept largely intact, with products probably rebranded Virgin Money.

Virgin and Northern Rock both declined to comment.

Northern Rock shares jumped as much as 6 percent before falling back. Virgin joined several other companies circling the lender, which was offered emergency funding by the Bank of England a month ago after facing a funding crisis, a move that sparked the first run on a major UK bank for more than 140 years.

By 10:50 a.m., the shares NRK.L were up 0.8 percent at 260 pence, valuing the bank at just over 1.1 billion pounds.

The stock has rallied more than 60 percent this week as optimism has grown that the bank would receive a bid, but is still down two-thirds in the last month.