LONDON (Reuters) - The Bank of England detailed a ground-breaking plan on Monday to lend banks around 50 billion pounds to help them operate during the credit squeeze.

It said it would allow banks to swap mortgage-backed bonds which have become hard to trade for specially-issued Treasury bills.

This would free up banks' balance sheets, allowing them to lend more to households facing a dwindling choice of mortgage options and declining property values.

Here are the key points of the plan:

* The asset swaps will be for long terms. Each swap will be for a period of 1 year and may be renewed for a total of up to 3 years

* The risk of losses on their loans remains with the banks. A fee based on three-month London interbank interest rates will be required.

* The swaps are available only for assets existing at the end of 2007 and cannot be used to finance new lending. Banks can benefit from the scheme during a six-month window starting Monday.

* The BoE a range of high quality assets in the scheme including AAA-rated securities backed by UK and European residential mortgages.

* The scheme will be guaranteed by the Treasury but is designed to avoid the taxpayer taking on risk.