By Sharon Lundy of NZPA

Wellington, May 17 NZPA - Local authorities appear to support a Government package announced today to fix some of the nation's leaky homes.

Building and Construction Minister Maurice Williamson announced the Government and local authorities would each contribute 25 percent of the agreed repair costs, with the homeowner picking up the remaining 50 percent. The Government would guarantee homeowners' loans to repair their property -- provided applicants meet bank lending criteria.

The Government's contribution was estimated at $1 billion.

Key mayors were briefed today ahead of the announcement, and a May 31 deadline has been set for majority acceptance for it to proceed.

Auckland Mayor John Banks said he and Wellington Mayor Kerry Prendergast had been in touch with most of the Auckland area mayors this afternoon and were "confident of a buy-in".

"This is a very hopeful day for thousands of families up and down the country who are living in abject misery in leaky homes, worried sick about how they're going to make ends meet, worried if they can afford to even stay in their home and worried that no help is on the way," he said.

He estimated it would cost the new Auckland council about $1b over five years and said planning was already in place to accommodate that.

"We cannot, and are unable to, quantify the amount of money. We can quantify the misery but not the amount of money," Mr Banks said.

"What we do know is that in Auckland city alone last year, we spent $6m on lawyers. We want to get that money out of the law firms and give it to gibstoppers, painters and builders to fix the problem."

Ms Prendergast said local authorities had proposed the same 25-25-50 split to the previous government, which had rejected it.

"So it is something that we have been working to for some time and it's why we're so delighted that this Government has listened and come up with a package pretty much where local government was coming from several years ago," she said.

Local authorities had wanted a no-fault solution which got people back into their homes, and she was confident this would achieve that.

However, not all leaky home owners will be eligible. A PricewaterhouseCoopers report last year estimated that 22,000 to 89,000 homes could be affected given the time period, with 42,000 likely to be leaky based on design and materials. Only about 3500 had been repaired.

Only homes flagged as leaky with the Department of Building and Housing within 10 years of being finished would be eligible. A home built in 1995 but notified to the department as being leaky in 2003 would be covered but one built in the same year and not notified would not. Notifying the department effectively "stopped the clock".

Based on some missing the 10-year qualifying period, officials estimated 23,500 would be eligible for today's package -- leaving possibly tens of thousands to pursue other options.

Mr Williamson said while it was hard for those not covered, there had to be a cut-off.

Prime Minister John Key said the package was a major commitment from the Government, especially given the current economic climate.

However, he was satisfied it was justified.

"Some people may ask why taxpayers should have to contribute so much to this when only a minority of people around the country are directly affected. My answer to that is simple: It's the right thing to do."

It was hoped the package would be in place by early next year.

The New Zealand Bankers' Association said that while no commitment had been made, its members were keen to work with the Government on the details of the proposed package.

The association represents ANZ, ASB, BNZ, HSBC, Kiwibank, National Bank, Rabobank, TSB and Westpac.

The Building Industry Federation said the financial package was a base for moving forward.

"We believe the Minister of Building and Construction has represented the industry and affected home owners very well in a difficult budgetary environment," said the federation's chief executive Bruce Kohn.

"There will inevitably be examples of home owners who are unable to take up the assistance to be made available, but in the circumstances it is a welcome package."