Allen & Overy (A&O) is in line to pick up a high-profile advisory role if the Government pushes ahead with plans to introduce 100-year sovereign bonds to take advantage of Britain's historically low interest rates.

The magic circle firm is currently the primary adviser on this type of work to the Debt Management Office (DMO), which would be charged with testing market appetite for the new gilts, which are expected to form part of Chancellor George Osborne's annual budget next Wednesday (21 March).

A&O City finance partner Geoff Fuller has regularly advised the DMO on previous bond issues.

Osborne's long-term bonds, which would mature in at least 100 years and could even be issued with no set redemption date, would allow the Government to lock in the benefits of the current low borrowing costs for years to come.

While the DMO – the Treasury agency responsible for debt and cash management for the UK Government, including gilt issues – regularly issues sovereign debt, the so-called 'super-long gilts' being proposed by Osborne (pictured) do not currently exist. The most notable examples of similar bond issues in the past were used to finance Britain's debt after the First World War and after the 18th-century South Sea Bubble.

Finance lawyers have predicted that the potential value of any such bond issue will be at least £1bn, depending on market interest. The Government is expected to kick off a market consultation after the budget announcement to gauge interest and determine the size and most appropriate structure of the bond.

The DMO could then use one of two routes to launch the bond – an auction process or appointing a syndicate of managing banks.

One City finance partner said: "The bond would need to be of a significant size, and actually help reduce the country's deficit, in order for it to be worthwhile. Based on the current low interest rates, the Government is issuing bonds at the cheapest funding rates ever. It would make complete sense to lock in those benefits by issuing something more long term."