Homeowners in Oxfordshire have been told to brace themselves for a house market crash which could inflict "misery" on families who have taken on massive debts.

Vince Cable, acting leader of the Liberal Democrats, said the housing market was already seizing up, with people finding it harder to sell their homes.

He warned that a nationwide crash, leading to a rise in repossessions and negative equity, would be most painful for homeowners in Oxfordshire and other places with "particularly inflated" prices.

Mr Cable said: "Gordon Brown's reputation is built on economic growth but there are ominous signs that the bubble is now about to burst.

"Brown's economic miracle has been over-dependent on consumer spending generated by mounting household debt, much of it secured against a grossly inflated bubble in the housing market.

"With the credit crunch now biting and the economy slowing we could see millions struggling to pay their debts, leading them into mortgage arrears, repossession and negative equity."

He told the Oxford Mail that homeowners in Oxfordshire, as well as other places in the South East with very high house prices, would be vulnerable in the event of a crash.

He said: "We would normally expect where prices are particularly inflated, the capacity for a big fall is greater."

But he added: "I don't want that to happen and I don't want people to find themselves in that distressing situation. That's why we want the Government to act now."

Mr Cable, who is also the party's shadow chancellor, wants the Government to make the Bank of England responsible for controlling house price inflation, introduce tighter guidelines for lenders and consider developing rescue plans, such as part-rent-part-buy, to help families stay in their homes in the event of a crash.

The MP pointed out that people had had no alternative but to take on "ludicrous levels of debt" if they wanted to get on the housing ladder.

He declined to predict exactly when a crash might come but said: "If there is a housing crash, the Prime Minister will be at fault and will have to take responsibility for causing misery to millions."