The husband's private pension is often among a couple's largest assets when they divorce, but at present courts cannot take pensions into account when calculating a settlement.

Harman: "important step"

This means that many women who have spent most of their married lives at home looking after children have to survive in old age on a basic state pension and income support.

The new draft bill will allow private pensions to be divided equally between divorcing spouses.

Social Security Secretary and Minister for Women Harriet Harman said: "Many women face poverty in retirement after divorce, despite the contribution they have made to their husband's pension".

"This is an important step towards fairness and security in retirement for women and it is part of reforming pensions."

Ms Harman did not think pension sharing would "encourage or discourage divorce".

"Divorce is the result of a breakdown in a personal relationship."

The cost of transfers within and from pension schemes - estimated at £200-£1,200 per couple - will fall on those divorcing, not the taxpayer, employers or other scheme members.

However the proposals are expected to cost the Treasury at least £65 million, although they should save at least £5 million in income-related benefits.

It is estimated about 50,000 people a year - most of them women - will be helped, although the new system may not be fully in place until 2000.

It is a notoriously complex issue to resolve and today's publication is merely the first stage in a long process.

The draft bill allows full analysis by MP's and experts, including the Commons social security select committee which will take evidence on the proposals, before reporting by the end of October.