The European Union will approve Wednesday British government's plans to split failed Northern Rock bank into two parts viz. 'good' and 'bad' bank.

'Good' bank will that will deal with retail deposits, will include Northern Rock's healthy assets, while 'bad' bank will retain toxic assets of the failed lender.

The sources said that break up will bring a new, healthy bank created in early 2010.

Speaking on the issue, PM Gordon Brown said, "We expect that once we've completed the restructuring of the banks the tax payer will make money."

Moreover, once the Northern Rock is split the government could look at an eventual sale to enhance competition in the UK.

Authorities could resort to sell bank's assets to new institutions trying to get a foothold in the UK, potentially crafting 3 new banks in the approaching 5 years.

Northern Rock bank got nationalised in 2008, after getting rescued by the government in 2007.