LONDON (Reuters) - Part-nationalised bank Lloyds said on Sunday that a flotation of some 630 bank branches which it has been ordered to dispose of by regulators remained an option, along with a sale of the branches. "Lloyds has always said that an IPO (initial public offering) is an option, as part of the dual-track process," said a company spokeswoman. Lloyds has given the auction the code-name of "Project Verde." European regulators ordered Lloyds to sell the branches as payback for being bailed out with taxpayers' money during the credit crisis, which led to the British government ending up with a 40.6 percent stake in Lloyds. Lloyds' spokeswoman added that the bank had contacted British listing authorities as it examines the possible flotation of the branches. "They have spoken to the UK listing authorities because that would be part of the natural process," she said. The Sunday Telegraph reported that a flotation of the Verde assets was now considered by Lloyds as a "near certainty," but Lloyds said it had no preferred option yet between either a sale or spin-off. Britain ended up with 83 percent of Royal Bank of Scotland and its Lloyds stake after rescuing both during the credit crisis with taxpayer bailouts, and RBS has also been told to sell off a host of assets. The sale of the Lloyds branches coincides with plans by Britain to sell Northern Rock, the retail bank which was fully nationalised after nearly collapsing during the financial crisis. However, both sales have encountered a certain amount of difficulty, with the valuation of the assets hit by the financial market turmoil. Virgin Money has been competing with private equity firm JC Flowers to buy Northern Rock, and The Sunday Times reported that Virgin was close to a Northern Rock deal. New British bank venture NBNK Investments has been competing with Co-Operative Financial Services and Sun Capital for the Lloyds branches, although NBNK has so far been the only one to submit a second-round bid. NBNK is also weighing up bidding for Northern Rock, sources with direct knowledge of the matter have told Reuters, raising the possibility that it could seek to combine Northern Rock with the Lloyds branches to create a large new UK bank. Sources have said that NBNK has bid some 1.5 billion pounds for the Lloyds branches, while Sun Capital has expressed concerns on its part over the costs of bidding for those assets. Both the Lloyds' Verde branch disposal and the Northern Rock sale have looming deadlines approaching. Britain has said it hopes to find a buyer for Northern Rock by the end of this year, while Lloyds has also aimed to reach a final decision over the Verde assets by this time. ($1=0.627 British Pounds)