Record number lose homes - but government rescue package helps just 18 families in Yorkshire

The 285m project aimed to help more than 5,000 families in Britain but only 276 completed the programme as 46,000 properties were repossessed.

The Government insisted, however, that the Mortgage Rescue Scheme was working, stating that 242 households in Yorkshire had received some form of help that meant the immediate threat of repossession was lifted and many more were given free advice from their local authority.

But Housing Minister John Healey, the MP for Wentworth, sparked fury when he said in a radio interview that "for some people home repossession can be the best option", suggesting it was better than getting into spiralling debt.

The Tories insisted he should apologise immediately with Shadow Housing Minister Grant Shapps accusing him of having "lost touch with reality".

"John Healey has claimed that repossession can be the best option," he said. "Tell that to the 46,000 families being booted out of their homes in the last 12 months of Labour's record recession."

Kris Hopkins, Tory candidate for Keighley and chairman of the region's regeneration and housing board, accused Mr Healey of making "outrageous and callous" comments, while Liberal Democrat housing spokesman Sarah Teather said the Minister should "just shut up".

She said: "These comments are grossly insensitive to families booted out of their home. Labour has no idea what life is like for victims of the recession."

But Mr Healey hit back, insisting the rate of repossessions has been slowing and they are still at a much lower level than under the Tories.

"This Labour government has put support for home owners at the heart of our response to the downturn.

"Grant Shapps and his fellow Tories haven't learnt anything from their past mistakes – they are dismissive of the help we have put in place and propose cuts that would hinder economic recovery."

Repossessions last year hit the highest level since 1995 and are 15 per cent more than in 2008, according to the Council of Mortgage Lenders (CML).

But the figure is well down on the group's original forecast that 75,000 people would lose their home during the year, although this was twice revised down to 48,000 when the predicted flood of repossessions failed to materialise.

A further 188,300 home owners were also in arrears of at least 2.5 per cent of their outstanding mortgage debt at the end of last year, although this was three per cent lower than during the third quarter.

But the CML warned the economy was not "out of the woods" yet, and said 2010 was likely to be a challenging year for many home owners. It has previously predicted that 53,000 homes will be repossessed this year, with a further 205,000 people ending 2010 in arrears.

The Mortgage Rescue Scheme was launched in January 2009 and enables vulnerable households who are facing repossession to sell some or all of their home to a social landlord and rent it back.

The scheme was extended to include people who are in negative equity, while a fast-track team has been set up to handle certain applications following criticism over how long it took people to go through the application process.