The appeal to the government by the UK's leading accountancy firm coincided with predictions that figures due out tomorrow will show the number of people going bust has rocketed.

PwC said that it was time for a 'simplified' alternative to bankruptcy for those who struggle with debt. It is suggesting a 'consumer arrangement' scheme for debtors owing up to £30,000 that would simplify negotiations with creditors. Debtors would pay back at least 20p per pound by electronic transfer and failure to do so would automatically trigger full-scale bankruptcy.

The call echoes a similar appeal made in April by R3, the insolvency trade association, for a procedure to target debtors with no income and no assets.

Friday's DTI statistics will be the first official indicator of personal insolvency levels since 'softer' bankruptcy regime was introduced in April.

R3 council member Peter Sargent said: 'It will be no surprise to many in the insolvency profession if the bankruptcy figures have once again soared. The insolvency profession is seeing a great number of people on the brink and further interest rate rises coupled with any fall in property values may well serve to push them over the edge.'

The insolvency service said that the department for constitutional affairs, Choice of Paths consultation was considering options to manage over-indebtedness.