The government has conceded defeat in its quest to bring all council housing up to the Decent Homes standard by 2010.

Housing minister Yvette Cooper has written to those councils that have not yet set out their plans for achieving the 2010 deadline. In the letter, she offers to give them more time to achieve the target if they can show that their stock improvement plans are part of a wider regeneration project.

But the offer of extra time is available only to councils such as the London Borough of Camden, that can demonstrate a good record of stock refurbishment.

The letter coincided with predictions among housing sources that the government would push the deadline back to 2012.

Building revealed last month (7 April, page 11) that the government was planning to replace the Decent Homes standard, which specifies the standards that individual dwellings should be brought up to, with a wider benchmark for the upgrading of entire estates.

A spokesperson for the Department for Communities and Local Government said: "Authorities will be given leeway but only if the schemes make a wide-ranging impact on their area and they have a good strategic approach to regeneration."

The spokesperson added that a new deadline had not been fixed. However, 2012 is being widely mooted as the revised cut-off date for the programme, under which councils can call on extra funds if they hand over their stock to housing associations or arm's length management organisations.

Former communities minister David Miliband admitted last year that about 10% of all council housing would not be up to scratch by 2010.

Ruth Kelly, who has taken over his responsibilities, referred to the Decent Homes standard in her inaugural speech in her new job.

She promised that the government would set out fresh thinking on the standard "soon".

An announcement of the government's new targets is likely to accompany the publication of guidance for councils bidding for the next round of Decent Homes funding, which must appear before the middle of next month.

Gwynneth Taylor, policy officer for the National Federation of Almos, welcomed signs of Whitehall's flexibility on the 2010 deadline.

She said the original date had been creating a bottleneck among contractors that threatened to drive building costs beyond the reach of Almos, which rely on government subsidies to upgrade their stock.

Cooper's letter was sent out as the Defend Council Housing campaign gathered in London for its annual conference.

Former Labour Cabinet ministers Frank Dobson and Michael Meacher were present, as was Jack Dromey, the deputy general secretary of the Transport and General Workers Union. All three called on the government to give equal financial treatment to councils that retained ownership of their stock and those that handed it over to associations or Almos.

Biography of a policy

2000 Former housing minister Nick Raynsford publishes housing green paper that sets out the Decent Homes target

2002 Progress suffers a reverse when tenants in Birmingham vote to reject transfer

2004 The programme takes a further blow when Camden tenants reject an arm’s length management organisation

2005 Communities minister David Miliband admits that the target will not be met by 2010