Alistair Darling should reject setting up an American-style mortgage agency as a way to give a long-term boost to the crippled housing market, according to Sir James Crosby, the former chairman of HBOS.

Sir James, who was commissioned by the Chancellor to find ways to get the stagnant mortgage market running again, will deliver his interim report today. In it, he is expected to reject any suggestion that the Government set up a mortgage agency similar to Fannie Mae and Freddie Mac, the two troubled American companies that nearly collapsed recently.

Much has been said about the case for launching an American-style agency, but it seems unlikely that it would be right to tackle Britain's problems with last century's solution, particularly given the time that it would take to create any such agency, Sir James will say.

Fannie Mae and Freddie Mac underpin the American mortgage market and between them guarantee one in every two home loans in the United States, a liability totalling $5 trillion (£2,500 billion). The agencies work by packaging up bundles of mortgages from US lenders and selling them on to investors. It was the securitisation of so-called sub-prime mortgages that precipitated the global credit crunch. Fannie and Freddie invest and sell prime mortgages only to homeowners with good credit histories, but even these markets have not been immune to the severity of the slowdown and the US Government has been forced to step in and come to their rescue.

Given the state of the Treasury's finances and the billions of pounds spent on the rescue of Northern Rock, it was unlikely the Chancellor would have considered a similar system. Instead, he is thought to be keener on an interim solution, in which he will agree to extend the Bank of England's existing £50 billion special liquidity scheme.

Mervyn King, the Bank's Governor, announced the plan this year to help banks out of their immediate crisis by allowing them to swap vast backlogs of mortgage-backed securities issued before last year for Treasury bills that could be used to raise finance.

Such mortgage-backed securities underpinned a third of all new mortgages until last year. Today, however, that market remains largely closed. Mr Darling's proposal would give a much-needed boost to the housing market by allowing banks to refinance mortgages issued since 2007.

The Chancellor is keen to emphasise that any involvement by the Government would be short term. Nor does he want to give the impression that the Treasury is about to rescue the mortgage market. Any such proposal would be introduced only in his autumn Pre-Budget Report (PBR). Instead, Mr Darling wants Sir James to come up with a long-term plan to give investors confidence to come back and reinvest in mortgage-backed assets.

Among the options being considered is the introduction of a ratings-style agency for mortgage securities to provide a gold standard that would give reassurance to potential investors about the underlying assets quality.

Sir James's report and letter to the Chancellor - to be made public this morning - will stop short of making formal recommendations and will be mostly analytical in nature. He will examine in detail the securitisation market, its growth and importance to the residential mortgage market prior to the onset of the credit crunch. He will also draw comparisons with international markets. The full report, with recommendations, will be published at the end of September or early in October, for inclusion in the PBR.

When the review was launched in April, Sir James said that he wanted to find market solutions to the problem. “These difficulties stem from problems in the markets, so to be effective any proposals to deal with them must be market-developed and market-led,” he said. Yet despite spending months consulting mortgage industry experts, including banks, building societies and other specialist lenders, Sir James is expected to tell the Chancellor that no clear consensus has yet emerged on how best to tackle the problems in wholesale funding markets.