Thousands of teachers and nurses will get interest-free loans of up to £50,000 to buy their own homes.

Deputy Prime Minister John Prescott has announced key workers in East and West Sussex would be eligible for part of a £690 million Government scheme offering them help to get a foot on the property ladder.

The Government believes the cash will encourage people to stay in their chosen careers, rather than shift to better-paid jobs in the private sector.

It is also aimed at attracting key workers to the more expensive areas such as Sussex.

The announcement, supported by Education Secretary Charles Clarke and Health Secretary John Reid, builds on the Starter Home Initiative, which has helped 260 workers buy homes in Sussex since its launch in 2001.

Nationwide, the Starter Home Initiative is on track to place more than 9,000 key workers into home ownership by the end of the month, with a further 1,200 expected to complete purchases in the following weeks.

The scheme offered loans of £30,000 to workers in Sussex and other areas of the country but ministers realised that with property prices continuing to rise this was no longer enough.

Mr Prescott said the latest scheme, Key Worker Living, offered three options for key workers in Sussex.

Homebuy - which provides an equity loan of at least 25 per cent of the property value, or up to £50,000.

Intermediate renting - which would be a rent between social and open market rates.

Shared ownership on new-build schemes - the purchaser buys at least 25 per cent of the equity and pays rent on the balance.

In London, some teachers will be offered loans of up to £100,000. Housing associations will look after the scheme, with the MOAT Housing Group running the programme in Sussex.

Grants will have to be repaid in full if the worker either sells the home or changes career.

Mr Prescott said housing was at the top of the Government's agenda along with jobs, schools, health and fighting crime.

He said: "We are determined to make a difference in the performance of our schools and hospitals and help those working in community safety.

"The Key Worker Living scheme offers housing solutions to those in front-line roles in key public services in London, the South-East and the east where recruitment and retention is particularly difficult."

Education Secretary Charles Clarke said he was delighted workers in the education sector were included in the programme.

He said: "We know housing costs are a significant reason why school and FE teachers and children's social workers leave London and the South-East.

"This threatens our commitment to raising educational standards and improving public services. We need to retain experienced staff in London and the South-East to provide high-quality services and ensure young people fulfil their potential.

"I hope key workers in education will take advantage of this scheme."

Those eligible for help include nurses and other NHS clinical staff, teachers in schools and further education and sixth-form colleges, prison service and probation service staff and social workers.

Firefighters in Sussex have not been included in the scheme and Sussex Police have opted out.

For more information, call 0845 6006699 or log on to www.odpm.gov.uk/keyworkerliving.