But flagship regeneration programmes could be cut from nine to five in next four years

The government has pledged to pump £1bn into the housing market renewal programme in an attempt to allay anxiety among investors that it may scale it back.

Fears for the future of the initiative were triggered by documents published in an annexe to last week’s Comprehensive Spending Review, which said that four of the nine renewal pathfinders would be wound up by 2011.

Iain Wright, a junior minister at the communities department, moved to calm concerns by announcing that £1bn has been allocated to the pathfinders over the next three years.

He said: “We remain completely committed to the housing market renewal programme.”

Officials denied that the papers represented government policy, adding that the future of all nine pathfinders was safe for the next three years. The report has been taken off the departmental website but it has lent weight to concerns over the scope of the pathfinders.

A communities department spokesperson said the focus of renewal would shift to new-build rather than repair and refurbishment.

Derek Long, director of the National Housing Federation’s northern region, said any questions over funding levels were bound to undermine confidence. He said: “To provide housing associations and private investors certainty in what are still fragile markets, it is essential that government provide speedy and clear assurances about its investment plans.”

He added that the £1bn figure announced by Wright was a £50m reduction in funding. Once the rising cost of land and housing in the pathfinder areas was taken into account, he said the reduction worked out at 14%.