There has been a massive jump in the number of local authorities running affordable insurance schemes for their housing tenants, a new report published by the ABI claims.

The report, which was carried out by economists at University of Bristol, claims that the number of local authorities running so called "insured with rent" schemes - which provide affordable house contents insurance - is up from 43% to 51% while a further eight per cent of local authorities were in the process of setting one up.

The average number of households in individual schemes was 2,088 in 1999 but the numbers varied hugely from as few as 50 in the more recently established schemes to a massive 21,700 in those that were established. An estimated six million households in the UK have no contents insurance.

The report's publication will help fend off criticism from the Treasury which is to release its report on social exclusion and financial services in the coming weeks.

The new research re-visits the 1998 Joseph Rowntree report which looked at why one in four households had no insurance policy.

ABI director general Mary Francis commented: "Insurance companies are committed to finding ways of overcoming barriers which discourage people from purchasing insurance."