Britain's credit laws could be subject to a radical shake-up under government proposals expected today.

The Queen's Speech is predicted to contain a new "Consumer Credit Bill", replacing the Consumer Credit Act of 1974.

The move follows the announcement that personal debt has reached the £1 trillion mark for the first time.

A white paper published a year ago outlined plans to scrap rules penalising customers who manage to pay back their loans early and to give the Office of Fair Trading additional powers to fine moneylenders and conduct surprise raids on debt companies.

In addition, information contained in advertisements for financial products would be standardised to make comparison easier.

However, ministers have ruled out placing a ceiling on interest rates.

The move follows research showing that tighter rules would make access to credit more difficult for those on low incomes, diverting them to either less appropriate products or to illegal loan sharks.