Taxpayers will on Thursday take another step towards recouping money injected into the banking system during the 2008 financial crisis with the formal launch of a £5.5bn auction of housing loans.

Sky News has learnt that UK Asset Resolution (UKAR) will announce that it has kicked off the process to offload the Bradford & Bingley (B&B) mortgages, more than six months after bankers were hired to prepare the process.

Significantly, the sale proceeds will‎ be used to repay the outstanding £4.7bn of a Treasury loan to the Financial Services Compensation Scheme (FSCS), the interest on which is paid by Britain's five biggest banks and Nationwide, the building society.

£11bn of that loan has already been repaid.

The return of the remaining sum, expected to take place early next year, will mark another milestone in removing the legacies of one of the ‎worst financial crises in British history.

Philip Hammond, the Chancellor, said in his Budget last week that further disposals of Royal Bank of Scotland shares would resume within about 18 months.

Among those expected to table bids for at least part of the mortgage assets are Blackstone, the New York-based private equity giant which acquired an £11.8bn portfolio alongside Prudential earlier this year.

Challenger banks such as OneSavings Bank and hedge funds including Och-Ziff are also likely to be among the parties expected to consider offers.