LONDON -- The U.K. government is planning to unveil Tuesday plans to help homeowners facing repossessions as well as first-time buyers as it seeks to mitigate the impact of the economic downturn.

The government will take a bigger role as the landlord to the country's poorest households for the first time since Margaret Thatcher, in a landmark move, began allowing low-income households to buy previously public housing. Expanding on plans announced earlier this year, the government is now prepared to buy housing and rent it back to tenants; lend money to people to buy homes; and build more homes, a spokesman for the Department for Communities and Local Government said.

The announcement is part of a larger package that will include ways to help people cope with higher fuel bills.

Under what the government calls a "mortgage rescue scheme," people facing repossession of their homes will be offered options: Government agencies can buy their home and rent it back to them; the government can buy a stake in their home by paying part of their mortgage; and they can apply for a government loan to reduce their mortgage payments.

Write to Alistair MacDonald at alistair.macdonald@wsj.com and James Herron at james.herron@dowjones.com

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