Freshfields Bruckhaus Deringer has underlined its close links with the Bank of England after taking lead advisory duties on the bank's £50bn liquidity support programme.

Freshfields is advising the longstanding client on its plan to swap secured Government bonds for premium mortgage debts held by commercial banks in a bid to restore liquidity to the inter-bank debt markets.

Financial services chief Michael Raffan is leading an eight-lawyer team for Freshfields that also includes banking partner Mark Kalderon and counsel Mac Mackenzie.

Last year Raffan led as Freshfields advised the Bank – the oldest client of the elite City firm – on its part in an earlier initiative alongside central banks including the US Federal Reserve and the European Central Bank, also worth around £50bn.

Commenting on the latest instruction, Raffan said: "This is very significant because it is a big injection of liquidity and the first of its kind worldwide.

"The essential scheme is to enable banks to get rid of mortgage-backed securities and the Bank of England to take the mortgage as collateral."

Meanwhile, magic circle rival Slaughter and May advised HM Treasury on the latest package, with corporate partner George Seligman leading a team that also included corporate partner Charles Randall and dispute resolution partner Elizabeth Barrett.

The Treasury is a regular client for Slaughters, which advised the department on the controversial nationalisation of troubled lender Northern Rock in February. Randall led the team for Slaughters on that instruction.

News of Freshfields' appointment for the Bank comes as it emerges that Linklaters is acting for longstanding client Royal Bank of Scotland on its record-breaking £12bn rights issue.