Losses linked to the meltdown of the US sub-prime mortgage market may reach $285 billion worldwide, according to a new report which also said the worst of  the crisis may be over.

Credit rating agency Standard & Poor's said it had increased its estimates for the global financial community from $265 billion earlier this year as write-downs have continued to rise.

The losses come from sub-prime mortgages - those made to  borrowers with weak credit histories - which are then re-packaged into investment products sold to investors around the world. These are known as collateralised debt obligations (CDOs) and residential mortgage-backed securities (RMBS).

S&P analysts said that despite the higher estimate, global banks are past the halfway point in recognising and writing off the losses from sub-prime securities. The report sparked a recovery in financial stocks on Wall Street this evening.