The Bank of England has unveiled a £50 billion plan to stave off the worst effects of the credit crisis on the mortgage market.
Under the scheme banks will be able to swap risky mortgage securities for stable, government-backed bonds.
Lenders have tightened access to mortgages as wholesale funding sources for banks have tightened.
Bank of England governor Mervyn King said that the move aimed to increase liquidity in money markets.
However only high-quality mortgage debts are able to be exchanged for the gilt-edged securities.
The swap scheme, which starts on Monday, will be for a period of one year and may be renewed for a total of three years.
It will only apply to mortgage debts on banks' books at the end of 2007 and the swaps cannot be used to finance new lending.
The central bank anticipates that initial take-up of the scheme will total £50bn but there is no cap on lending.
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