Sir John Harman, chairman of the Environment Agency, has warned the industry that its step-by-step approach to sustainability is no longer good enough and radical change in the design of housing is essential.

Harman, who co-chaired the government taskforce that worked on what was the code for sustainable buildings, said progressing beyond code level three would involve a radical rethink. He told a conference on eco building in London this week: “This won't be about small, incremental steps. If we are going to crack this issue, we are going to have to rethink housing design. We can't continue to churn out standard designs.

“The incremental adjustments to current housing design will only get us so far. The furthest you could push it is code level three.”

He said the pace of change meant that firms that were willing to rethink would benefit.

He added that the code for sustainable homes should be applied to existing stock.

He suggested cutting council tax bills for code-compliant homes. Ian Pearson, the environment minister, said the government would publish its climate change bill shortly.

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