Northern Rock nationalisation report lifts pound

TOKYO, Dec 5 (Reuters) - The pound trimmed losses on Wednesday on a report that the British government has drafted a plan to nationalise troubled mortgage lender Northern Rock NRK.L if it fails to strike a deal with private buyers, traders said.

The report in the Daily Telegraph newspaper helped sterling recover to $2.0575 <GBP=D4>, down slightly on the day, from a low of $2.0550 hit earlier. The pound also shook off earlier losses and rose 0.2 percent against the yen to near 226.30 yen <GBPJPY=R>.

The Labour government is working with opposition Conservatives in hopes of winning bipartisan support for the nationalisation bill as a fallback option, the paper reported without citing sources.

The pound fell earlier after a survey from the Nationwide building society showed British consumer confidence tumbling in November at the fastest pace in more than three years, highlighting the hit to morale from the credit squeeze and rising living costs. (Reporting by Eric Burroughs)