Guardian.co.uk

Northern Rock has been forced to drop several of its savings products after worried savers flooded it with their money, just a year after they queued to take it out.

The bank, which was nationalised in February, was forced to act after the inflow of savings threatened to breach its commitment to not hold more than 1.5% of all UK deposits.

It blamed 'recent turbulence in financial markets' for the decision to stop offering several of its high-interest accounts to new customers.

'Northern Rock is therefore taking further action to moderate its product range and product pricing, to uphold its competitive commitments,' the company said.

Northern Rocs is seen as one of the safest places to put savings as the government has promised to guarantee all its deposits. With shares in HBOS fluctuating wildly, there has been a flood of savings into National Savings and Abbey as well as the Newcastle firm, helping it to shake off its reputation as Northern Wreck.

The Post Office also saw a surge in popularity this week after the Irish government guaranteed all deposits at its six domestic banks including Bank of Ireland – which run the Post Office's savings accounts.

This guarantee is coming under pressure, though, with angry banks in the UK concerned that it will harm competition. Yesterday the chancellor, Alistair Darling, twice telephoned the Irish finance minister to express his concerns.

There is also speculation that France may be planning to launch its own guarantee.

The products withdrawn by Northern Rock today are its Silver Savings and Silver Savings 30 accounts, which both pay a rate of over 5% but are only available to those over 50, its Business Reserve account for corporate customers, and a range of fixed rate onds. Existing customers are not affected by the move.