The Rudd Government's plan to rescue the commercial property market could have one of Australia's most prestigious properties as its first customer.

The Macquarie Group is struggling to refinance $128.9m in debts on No1 Martin Place in Sydney, which houses not only the bank itself but also the Australian Securities & Investments Commission.

Having put the property on the market late last year, market sources say the only offer it has so far received would represent a 22.6% loss on the property's value as at June 2008.

The Government's planned public-private property fund, dubbed 'Rudd Bank' by the Opposition, has been designed to stop the fire sales of commercial properties, which it fears will undermine the health of the Australian banking system.

The Australian