Deputy prime minister turns down 5000-home extension plan, but is 'minded to grant' 3600-home alternative.

Deputy prime minister John Prescott has turned down long-delayed plans for a controversial 5000-home extension to Stevenage but allowed a smaller scheme on the same site.

In a decision issued at the end of last week, Prescott announced that he had refused the west Stevenage consortium’s application for 5000 homes on a 692 ha site next to the Hertfordshire new town.

But he has approved a smaller, simultaneously lodged application by the consortium.for 3600 homes on the site which includes 300 has controversially axed from the green belt in 1998 to allow housing development.

The West Stevenage consortium is made up of Taylor Woodrow, Persimmon and the Garden Village Partnership.

Prescott’s letter outlining the decision said he could not support the 5000-home application on the grounds that it was not catered for in the local councils’ development plans.

He said permission for the extra homes would have to wait until the new regional spatial strategy for the east of England, which includes Hertfordshire, had been finalised.

But he said he is "minded to grant" the consortium’s 3600-home application on the ground that it was provided for in local plans.

The consortium expressed disappointment that Prescott had turned down its larger application, but encouraged that he had granted the 3600 home scheme.

The consortium’s project director Andrew Dutton said: "This is an important step towards the delivery of much needed new housing in Hertfordshire, including nearly 1000 affordable homes. Our 5000 homes scheme would have provided over £180m of privately funded infrastructure investment. We will need to look very carefully at what proportion of the investment cane be delivered, and in what timescale, in relation to the 3600 home application."

The application was lodged in 2001, but was first proposed three years before that.