Hank Paulson's handling of the crisis at Fannie Mae and Freddie Mac is emerging as the main issue that will shape the legacy of the former chief executive of Goldman Sachs as US Treasury secretary.

Over the past 10 days, expectations have been mounting that Mr Paulson will have to make use of the virtually unlimited powers he was given by Congress in late July to rescue the two stumbling governmentsponsored mortgage companies with taxpayer money.