FAMILIES unable to pay the mortgage will be able to switch to renting to prevent them losing their homes, under an emergency government rescue scheme to be unveiled today.

Under the “sale and rent-back” scheme, a housing association will step in to clear the mortgage debt of homeowners hit by rising mortgage bills or sudden unemployment.

The families would then pay rent at a level they can afford to prevent homelessness – and the risk of local councils and the government facing higher bills to help them out.

Alternatively, the social landlord will buy a share in the threatened home – allowing some of the mortgage to be paid off – or provide a bridging loan to allow payments to be reduced.

Tens of thousands of homeowners will be helped, provided they have not “acted recklessly or irresponsibly”.

It follows an alarming increase in repossession orders by mortgage lenders this year. County courts in Liverpool, Birkenhead, Runcorn and Warrington have reported big leaps.

A three-prong £1bn housing strategy, to be unveiled by Gordon Brown, will also include an expanded shared equity scheme for potential first-time buyers and a big boost in funding for affordable housing.

But it was unclear last night whether another proposed emergency measure to kick-start the housing market – the suspension of stamp duty on homes up to £250,000 – would go ahead.

The long-promised housing package is the first part of the prime minister’s “economic recovery” plan to tackle both the worsening economic climate and his own dismal poll ratings.

The package will be followed later this week, or early next, by measures to help low-income households struggling to cope with crippling hikes in gas and electricity bills.

Around 70 Labour MPs have demanded a “windfall tax” on the soaring profits of the energy giants to fund one-off grants to vulnerable families.

However, the energy companies have protested fiercely, amid rumours of a split between the prime minister and chancellor Alistair Darling.

Mr Darling startled MPs by admitting that economic conditions were “arguably the worst they have been in 60 years”.

Mr Brown brushed aside speculation of a rift by insisting ministers were “getting on with the business of government”.