EU approves Bradford & Bingley rescue plan

British authorities notified the EU's state aid regulator on Tuesday of their 50-billion-pound ($89 billion) purchase of Bradford & Bingley's mortgage portfolio and the sale of its deposits and branches to Spanish bank Santander.

"The Commission was able to decide within 24 hours that the state aid measures comply with EU rules on rescue aid," the EU executive said in a statement.

"UK authorities have committed to submit a restructuring and/or liquidation plan within six months, which will be examined by the Commission under its rules on restructuring aid."

In a separate decision, the EU Commission extended its probe into the restructuring plans for stricken German state bank WestLB, which had to be protected by 5 billion euros in public-sector guarantees after risky investments it made turned sour amid the global crisis.

However, the EU executive said in a statement it was confident of reaching an agreement with the German authorities.

"An in-depth investigation provides a good opportunity for discussing the plan submitted in August in greater detail and finding a solution to ensure the long-term viability of WestLB," EU Competition Commissioner Neelie Kroes said.

Britain nationalized Bradford & Bingley on Monday, making the buy-to-let mortgage lender, which had a heavy exposure to wholesale credit markets, as well as the slumping British housing market, the second UK bank to be taken into public ownership this year amid a deepening global financial crisis.

The Treasury said it would take over B&B's 50 billion pound mortgage portfolio and sell its deposits and branches to Spanish bank Santander.

Santander will combine B&B's deposit and branch network with Abbey National, the UK lender it bought in 2004.