LONDON (AP) Britain's government is throwing nationalized lender Northern Rock back into the home loan business in a bid to spur the market for mortgages, a government official said Sunday.

The official said Northern Rock, whose liabilities were taken on by the taxpayer after it fell victim to the credit crunch last year, was ready to make as much as 14 billion pounds ($20 billion) available to homeowners over the next two years. He spoke on condition of anonymity because an official announcement was not due out until Monday.

The move is a reversal for the British government, which had originally sought to scrap the bank's home loan operation.

But with British banks still reluctant to lend to homebuyers and many still refusing to pass on the central bank's interest rate cuts in full, Prime Minister Gordon Brown is under pressure to make mortgages available through banks which the government controls like Northern Rock or Bradford & Bingley or has a strong stake in, such as the Royal Bank of Scotland Group PLC.

Investment analyst Justin Urquhart Stewart, of Seven Investment Management, told the BBC he welcomed the government's move, saying it would "provide more capacity into the system so money starts being lent again and that's what the British economy needs desperately."

Mortgage lending remains low: Net lending was 1.9 billion pounds in December, the last month for which figures are available, according to the Bank of England. The year before, the same figure stood at 7.7 billion pounds.

Copyright 2009 The Associated Press.