Gordon Brown is to unveil a multi-million pound package of measures that are aimed at reviving the housing market today.

More funds are to be made available to local authorities to help first-time buyers get a foot on the property ladder. Councils will buy repossessed and unsold properties, and offer financial assistance to borrowers in return for a stake in their homes or outright ownership.

The Treasury is also considering a postponement on stamp duty – the tax charged on the purchase of a property - for lower value homes, as well as a tax-free savings account for first-time buyers.

The prime minister is trying to recover political ground after months of declining support in opinion polls and chancellor Alistair Darling’s warning last weekend that economic conditions were “arguably the worst they’ve been in 60 years” and voters were “pissed off” with Labour.

On Sunday, the justice secretary, Jack Straw, attempted top play down Mr Darling’s comments, defending both Brown and Darling’s handling of the economy. “We’ve had a very good period of economic management and economic success which has, for sure, provided us with a really serious platform to weather these storms,” Mr Straw told the BBC.

The package will be followed later this week, or early next with measures aimed at helping lower-income households facing hardships as a result of rising fuel bills. Further measures aimed at reviving the wholesale mortgage market are being delayed by the Treasury until this autumn’s pre-budget report, pending agreement between ministers and the Bank of England.

According to the Treasury, the package could amount to around £1bn, bringing forward allocations already pledged and making available additional finance in new funds.

As Mr Darlings comments reverberate around Westminster, the Conservative government claimed the government was divided, and many within Labour believe Darlings head will roll when Gordon brown reshuffles his cabinet after his party’s conference at the end of the month.

“The problem with Alistair [Darling] is that he is disastrous in presentational terms and gives the impression of not being in control of events or responding to them quickly enough,” one Labour backbencher said.