The final report from the Expert Group on Mortgage Arrears and Personal Debt says the group is not recommending a formal debt forgiveness scheme.

The report from the group, chaired by Hugh Cooney, has recommended measures to help deal with the difficulties created by the country's growing level of mortgage arrears.

The report has concluded that arrears levels will persist for some time and may get worse before they get better.

However, it says that repossession levels in Ireland remain substantially lower than those seen in the UK and it also found that forbearance is working and is having a beneficial impact.

Today's report says that around 90% of mortgage accounts are being repaid in accordance with their contracts and two thirds of rescheduled loans are paying at least full interest on their accounts.

In the key recommendations in today's final report, the expert group says that a deferred interest scheme should be introduced for borrowers who can pay at least 66% of the interest on their loan.

This would give distressed borrowers five years to get back on their feet.

It also urges the Department of the Environment, Heritage and Local Government to quickly implement new regulations that will enable borrowers at risk of losing their homes to become eligible for social housing assessment before a repossession order has been made.

It also says that further consideration should be given by lenders to facilitate trading down by borrowers who are in negative equity and for whom such a move would result in more affordable monthly payments.

It calls for the introduction of new bankruptcy laws, while it says a new mechanism should be put in place to allow repossessed borrowers to stay in their homes for a time, which would allow the housing authority to find another appropriate home.

'We are committed to solutions that are fair and appropriate to the current circumstances of Irish homeowners,' Finance Minister Brian Lenihan said.

'The Government accepts the group's recommendations and wants to see them implemented without delay,' he added.

Banks representing 70% of the mortgage market has signed up to the reforms.

The banks who have agreed so far are AIB, Bank of Ireland, Irish Life and Permanent (owner of Permanent TSB) and EBS. Other banks may join.