As the crisis in the sub-prime mortgage market spreads ever further across the global financial system, attention will increasingly focus on the role of the rating agencies Moody's, Standard & Poor's and Finch in giving packages of mortgage backed securities investment grade ratings.

According to analyst Joshua Rosner, who in the past few days has travelled to Europe to advise regulatory bodies over the growing crisis, this sort of work has become an increasingly profitable part of the business of these three agencies.

Moody's revenue from "structured finance" products in the last quarter of 2006 was some $300 million, outweighing revenue from all other forms of rating.

The banks putting together packages of mortgages and slicing them into different degrees of riskiness usually obtain an investment grade rating for the least risky slice, which helps them to sell them to other institutions. But the packages are complex and opaque, as are the methods used to rate them

The fear is that the rating agencies are not moving fast enough to downgrade their ratings when the underlying borrowers begin to default on their loans, making the fallout worse when it does come.

"The longer they wait the worse it's going to be," he said. "You'll see massive losses from banks, insurance companies and pension managers."

Mr Rosner points out that Fitch upgraded the rating on New Century in October 2006, and only downgraded it again in March, helping to trigger the sub-prime mortgage lender's collapse a few weeks later.

Packaging loans has for long been seen as a clever way to allow people with lower credit access to a mortgage. It is in danger of being revealed as a clever way for lenders to hide debt.

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