What is needed is an intelligent and highly selective repudiation of such debt.

I think it is possible to transform the vast pools of unrepayable property-backed debt to a form of finance which does not have to be repaid ie Equity - just "not Equity as we know it, Jim".

We may achieve this Unitisation within a framework based upon Partnership law (%age shares or "nth's"), rather than Trust law (Units in Unit Trusts) or Company law (conventional shares).

The result is not so much repudiation as transformation.

The holder of distressed (ie unrepayable) debt exchanges his bonds for Units. He has no right to get his capital back from the user of the capital (the Occupier) but he can get some or all of his Capital back from other investors by selling to them his Units in the resulting "Rental Pool".

The amount he gets back depends on the rate of return on Capital investors require.

Since we index-link the Occupier's rental a rate of 2 to 3% is good in the current climate. The crucial point is that because the resulting rental is genuinely "affordable" (in large part because the obligation torepay Capital has been removed) it is therefore more likely it will be paid and the lower risk justifies the lower rate of return.

"The future is already here -- it's just not very evenly distributed" William Gibson