Alistair Darling is preparing to intervene to stimulate Britain's dormant housing finance market, according to senior government officials.

The Chancellor, who said yesterday that the nationalisation of the US mortgage giants Fannie Mae and Freddie Mac, would help the British economy, is waiting for a key report on which he will base his attempts to revive the British mortgage market.

Sir James Crosby, the former chairman of HBOS, is due to submit his final proposals to kick-start home-loan lending by the end of the month. Key elements in the Crosby report that Mr Darling is considering most closely are those to renew or extend the Bank of England's Special Liquidity Scheme (SLS) and another to create a government guarantee for high-quality mortgage securities.

Mr Darling's proposals are then likely to be finalised and presented in the Pre-Budget Report, which he is expected to deliver late next month.

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The SLS, established in April, allows banks to swap mortgage-backed bonds issued before the end of 2007 for much more tradable Treasury bills that can then be used to raise funds in the markets. Mr Darling is understood to favour, as a minimum, a renewal of the existing scheme beyond its scheduled October close. He is coming under pressure to act as that deadline nears.

Last week the Council of Mortgage Lenders said in a letter to the Chancellor that it believed “an early announcement of the renewal/extension of the Special Liquidity Scheme and any other measures being planned will help to resolve market uncertainty”.

Mr Darling is also said to be contemplating a multi-billion-pound plan for the Government itself to guarantee temporarily high-quality mortgage-backed securities. This could help to create investor demand for the quasi-government bonds, assisting lenders to sell on their loans and so increase the supply of finance for lending.

However, the Chancellor faces the prospect of opposition to the more adventurous proposals from the Bank of England. It has opposed a widening of the liquidity scheme to accept lower-quality collateral, such as new issues of mortgage-backed securities made since the December 2007 cut-off, However, it may be more amenable to a renewal of the SLS provided that all the other existing terms remain unchanged.

Mervyn King, the Governor of the Bank, believes there is little case for accepting new mortgage loans into the emergency financing scheme because lenders have large stocks of eligible bonds on their books that they have yet to swap for Treasury bills. He also believes that it is wrong for banks to issue new mortgages purely on the back of a government guarantee. The Bank is likely to be wary of a publicly funded subsidy for new lending.

Mr Darling is understood to sympathise with that stance but is eager to act. The response of the US authorities to their housing market malaise dwarfs the £1 billion package of mortgage-aid proposals outlined by the Government last week. Asked whether the bailout of Fannie Mae and Freddie Mac, engineered by the US Treasury Secretary Henry Paulson, would help the British economy, Mr Darling said: “Yes, I think it will help, for this reason: the American economy is by far the largest in the world. It affects our economy and it affects every other economy. And anything that is done in America that will help build confidence must help.”