Direct Line is calling on the government to press ahead with its plans to introduce a new Consumer Rights Bill in the Queen's Speech which bans the bundling of insurance products with mortgages.

It follows reports that the government may backtrack on the promise it made last December to stop lenders tying products to mortgages because of a shortage of parliamentary time.

In a letter to trade secretary Stephen Byers, Direct Line managing director for general insurance, Graham Ross said: “I urge you to do all you can to ensure that legislative time is found for this important bill.”

Direct Line, which has 950,000 home policy-holders, has been actively campaigning for laws that would outlaw the bundling of home insurance products with mortgages.

The direct writer said it had conducted research that showed that borrowers with mortgage-tied insurance often paid more than those buying stand-alone products.

Ross told Byers: “We were delighted when last December you announced that you would be taking action to outlaw the bundling of home insurance as a part of your plans to ‘clean up' the mortgage market.”

He added the bill would do much to help consumers avoid the “hidden nasties” that were all too common in the mortgage marketplace.

A spokeswoman for the Department of Trade and Industry said the government did not comment on proposals contained in the Queen's Speech.

Quite apart from measures to tackle home insurance bundling, a bill is necessary to further modernise consumer protection in the UK.