Tony Blair has stepped in to ensure the four housing growth areas in the South-east can deliver the hundreds of thousands of homes needed.
The prime minister is understood to have become involved to make sure massive infrastructure projects – schools, hospitals and roads – are delivered in the four areas: Ashford in Kent, Milton Keynes, Stansted in Essex and the Thames Gateway.

A government source said: "The deputy prime minister is very aware of these issues and the prime minister has now become personally involved. There are discussions about this at the very highest levels of government, and Cabinet will be contributing fully to the Communities Plan."

Further details of the Communities Plan emerged this week. The bulk of the extra £1.4bn announced by chancellor Gordon Brown in July is earmarked for the four growth areas and the nine housing market renewal pathfinders in the Midlands.

A source close to the plan added that the history of strained relations between the government and London mayor Ken Livingstone could play a deciding role in how much money goes to the Thames Gateway.

The news came as professor Mark Kleinman was recruited to head up the Greater London Authority's new housing and homelessness unit, at the request of the government.

The source said: "There is a big dilemma for the government over how much they put into the Thames Gateway – it depends on how much they trust Livingstone and the London Development Agency."

It has also emerged that the long-awaited National Audit Office report into the government's use of stock transfer to bring council housing up the decent homes standard, has been delayed until mid-January.

Privately, officials say the deputy prime minister has been distracted by the firefighters' strike and a row has been simmering in his department about the report's conclusions.

Councils to define ‘key workers’

Councils will be forced to take a more active role in addressing the housing needs of key workers, under other changes expected to be announced in the Communities Plan in January. The government has balked at providing an official definition. So councils will be handed the role of deciding who within their area will be defined as key workers. At a conference on key-worker accommodation on Friday, Richard Bramley, head of housing at the Government Office for the East of England, said local authorities were insufficiently aware of the housing needs of keyworkers. He said: “Local authorities will need to define locally who these key workers may be and then decide the housing needs of those groups.” The change is thought to have been prompted by government anxieties about the worsening shortage of essential skilled workers in the south and south-east of England.