The Northern Rock shareholders dispute is set to go to court early next year.

A four-day trial for the case has been set for January 2009 with shareholders attempting to secure improved compensation following the nationalisation of the crisis-hit lender.

The case will now be heard in front of a divisional court after the Government conceded during a hearing in August that permission should be granted for the shareholders to go to judicial review.

The shareholders launched their application for judicial review in May in an attempt to seek compensation. The largest group in the action is the UK Shareholders Association (UKSA), which is representing about 150,000 private shareholders who held up to 25% of the bank's shares. David Greene, head of litigation at UK group action specialist Edwin Coe, is advising the UKSA.

In addition, activist hedge fund SRM Global Fund, which acquired an 11.5% stake in the bank, has joined the UKSA in the review. SRM is being advised by White & Case litigation partner John Reynolds.

The shareholders allege the Government's compensation scheme in the wake of the nationalisation would leave the shares with a nil value whereas Northern Rock's book value before the February rescue was at least four pounds per share.