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Under the proposals, those struggling with mortgage payments could have the option of government sponsored shared ownership, shared equity or sale and rent back.

While the department of local government said it aimed to help 6000 homeowners, the scheme was firmly targeted on families who would be eligible for homelessness assistance.

Caroline Flint, housing minister, said: "We must ensure that repossession is only ever a last resort. The government is determined to play its part, and others must do the same.

"Lenders should be exhausting all avenues before repossessing, including looking at how they could extend mortgage rescue schemes to householders."

Jenny Challenor, mortgage strategist for Wolverhampton-based IFA Torquil Clark, said this still meant there were a number of borrowers, particularly those on high loan-to-value products, who were still not left with any options.

She said: "There is still a lot that needs to be looked at. Whether they can bring everything the client is looking for is a different matter.

"I think it is going to be a number of weeks before lenders look at their offerings and what they are going to do in their response to the government changes."