Mortgage lending is continuing to fall, leading home-loan providers warned, as they demanded further clarification of the small-print in the Government's bank bailout which appears to require a return to levels of advances last seen in 2007.

New figures, published by the Council of Mortgage Lenders, highlighted the desperate state of the British mortgage market, revealing a 63% drop in mortgage lending in August, compared to the same month last year.

The CML said the figures underlined the need for the Government to clear up confusion over the terms of the bailout, with comments by the Chancellor, Alistair Darling, appearing to contradict the guidance which had privately been provided to banks by the Government.

The Independent