The US Treasury has moved closer to a rescue plan for Fannie Mae and Freddie Mac, the two struggling government-sponsored mortgage groups whose fate is key to the future of the US housing industry and financial markets.

The exact form of the proposed government rescue remained unclear, but share prices for Fannie Mae and Freddie Mac declined 30.3 per cent and 26.6 per cent respectively in after-hours trading, reflecting investor concerns that the rescue plan would wipe out holders of equity in the groups while guaranteeing their debt.