* Says FSA renews waiver on use of Tier 2 capital
* Says capital base exceeds regulatory minimum (Adds detail, background)
LONDON, Oct 29 (Reuters) - Nationalised British lender Northern Rock said the financial regulator had agreed to waive restrictions on its use of capital, boosting its financial strength.
Northern Rock, taken into public ownership in February 2008 after the credit crunch left it reliant on government funding, said the Financial Services Authority had agreed to renew an earlier waiver allowing it to include Tier 2 capital as part of its regulatory capital buffer.
The bank said the FSA move had boosted its capital base above the regulatory minimum, and would allow it to achieve its previously-stated target of providing up to 4 billion pounds ($6.58 billion) in mortgage lending this year.
The British government on Wednesday won European Union approval for a plan to restructure Northern Rock which could eventually lead to a sale of the bank.
Northern Rock will get an additional capital injection of up to 3 billion pounds as a result of the restructuring plan. ($1=.6081 Pound) (Reporting by Myles Neligan; editing by Simon Jessop)