Bankers pressed the Treasury yesterday for clarity on a scheme to let homeowners facing repossession defer interest payments, amid confusion over who would be eligible, how claims will be policed and whether banks will be charged a fee.

Alistair Darling and Peter Mandelson, the chancellor and business secretary, faced a slew of questions from Britain’s biggest banks as they met to negotiate details of the hastily arranged scheme.

But amid a dearth of information over how the scheme would work in practice, there were growing worries over fraud, “moral hazard” and perverse incentives to borrowers who were already on debt management programmes. The broad principles were unveiled by Gordon Brown, the prime minister, on Wednesday just hours after lenders were first informed.

Financial Times