Countrywide Financial has been bailed out by 40 of the world's biggest banks, which pumped $11.5 billion (£5.8 billion) into the company only hours after Merrill Lynch said that America's largest mortgage lender could face bankruptcy.

The company said that it had drawn down the funding after the market for raising money through mortgage-backed securities had dried up. Investors have continued to take fright at any investment linked to the sullied sub-prime home loan market.

Of the $11.5 billion facility, $3.5 billion is available for one year. The remaining $7.9 billion will have to be repaid or refinanced at the end of four years.

Countrywide made its announcement as it emerged that the number of new houses under construction in the US had fallen to its lowest level since January and the number of new home permits was the lowest for a decade.

Countrywide said today: "In response to widely reported market conditions, Countrywide has elected to draw upon this entire facility to supplement its funding liquidity position."

Yesterday, Merrill Lynch, the US investment bank, downgraded Countrywide from a "buy" to a "sell".

Merrill Lynch said: "We fear that the acceleration of margin calls and forced asset sales in the capital markets could lead to more problems for [Countrywide] to finance its mortgage operations.

"If liquidations occur in a weak market, then it is possible for [Countrywide] to go bankrupt."

But David Sambol, the president and chief operating officer of Countrywide, said today: "Countrywide has taken decisive steps which we believe will address the challenges arising in this environment and enable the company to meet its funding needs and continue growing its franchise."

The lender also announced today that it intended to speed up moving its staff in its mortgage operation over to its banking division.

Mr Sambol said: "Our objective is to navigate the difficult conditions in today's market as we complete the transition of our bank business and funding strategy.

"With these changes, we believe we are well-positioned to leverage opportunities presented by a consolidating industry."

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