As John Prescott opens the first four units of the Greenwich Millennium Village today, is it living up to his vision as a "showcase to the world" or simply another Milton Keynes?
Does the Greenwich Millennium Village suffer from the curse of the Millennium Dome next door? The signs to date are not auspicious. The first four units of the 1377-dwelling settlement are to be opened today by deputy prime minister John Prescott, some 20 months after the initial deadline, set in 1997.

The most prominent structure of the new village is a solid concrete triple-decker car park – just the sort that was developed for 1970s housing estates and abandoned soon after. Close by, a cluster of low-rise row houses is slowly shaping up, already branded by Urban Design Group chairman Marcus Wilshere as "Milton Keynes dropped into inner-city London".

Perhaps the biggest curse on the Millennium Village is that it was conceived with extravagant government ambitions, to be, in Prescott's words, "a showcase to the world" of sustainable community development. Ten targets were set for the development (table, page 20), including an 80% reduction in energy use and a 30% cut in construction costs. Seven of these targets were quantified in percentage improvements, and these now conveniently serve as sticks with which to beat the project team.

The original competition-winning design team, including HTA Architects and environmental engineer Battle McCarthy, resigned out of disgust at their ambitions being "watered down" by the joint developers, Countryside Properties and Taylor Woodrow Capital Developments. In the same vein, the Tavistock Institute warned in March 1999 of "impending disaster" if "such a lack of understanding and implementation of the management processes" were allowed to continue. A systematic quality management framework encompassing construction standards and inspection procedures was not set up by the joint venture until September 2000.

Where the Millennium Village does manage to cut itself free from the dome is that nobody argues that its ambitious goals are in themselves fatuous. Even after the targets have been watered down, and their implementation allowed to slip, they should, nevertheless, be impressive and instructive.

And despite a detailed critique of the reconstituted scheme by HTA Architects and Battle McCarthy, only three of their original energy conservation ambitions have been abandoned or, more precisely, subsumed into more general targets. These were that building materials should be 80% recyclable, that 10% of energy should come from wind and solar sources and that carbon dioxide emissions should be reduced to zero by growing timber in the public open spaces to use as fuel.

The overriding problem for the project team is that, not only is each of the 10 targets ambitious in its own right, but taken together they create potential conflicts of interest. As well as aspiring to be a sustainable community, in the sense of Lord Rogers' urban renaissance, the village must also be green in the consumption of energy and water. And grafted onto these aims are the Egan goals of cutting construction cost, duration and waste, by means of prefabrication and efficient project management.

A DETR report on millennium villages and sustainable communities, published last September, stated the obvious: "If the Millennium Villages initiative is to seek uncompromisingly high achievement, the fact that this will take longer and often also cost more needs to be borne in mind." The joint venture's project director, Ross Hammond, admits that setting up the project took a year longer than anticipated, and the first nine-storey block faced a setback last July when Ellis Hill, the subcontractor for the timber-frame external cladding panels, dropped out after failing tests for weatherproofing. However, Hammond remains confident that the joint venture will achieve the target reductions in construction cost, duration and wastage over the five-year development programme.

To Proctor Matthews, architect for the low-rise houses within the masterplan of Swedish veteran architect Ralph Erskine, the potential conflict of targets present a special design challenge. "The humanism of Erskine's domestic townscape, overlaid with an almost industrial agenda of modular construction, makes for an exciting equation," enthuses Stephen Proctor.

What Erskine and Proctor Matthews have come up with to address this challenge certainly has a 1970s Milton Keynes aura. Row houses – though with added ingredients – are grouped together in irregular doughnut formations, enclosing landscaped communal courtyards. The streets between the doughnuts are significantly narrower than those of Milton Keynes in order to discourage through traffic and parking, and their paving is shared between pedestrians and vehicles. Each individual house is strongly articulated, with a steep monopitch roof and a vibrant pattern of cladding panels in cedar boarding, ribbed aluminium and blue render alternating with floor-to-ceiling height windows.

"The architecture doesn't wear its industrial technology on its sleeve," comments Proctor. "We've tried to combine prefabricated components to create something that people will enjoy living in."

Each house has been planned as two parallel strips, the wider strip containing the habitable rooms, the narrower one containing service spaces of bathrooms, kitchens and staircases. This arrangement allows the habitable spaces to be rearranged at later dates to cater for changing household needs. Living rooms can be split into two, so that one half can be used as a home office or, alternatively, two upper-floor bedrooms can be combined by removing partitions.

Proctor Matthews regards its design as experimental, rather than a new standard model. One of the new products that it is introducing to this country is a prefabricated cladding panel patented by Italian manufacturer Powerwall and tested at Taylor Woodrow's extensive materials testing centre. The panel takes the shape of a honeycomb of aluminium strips – a NASA spacecraft invention – onto which cement render is applied at the factory.

As with all experimental prototypes, the Millennium Village is likely to include weaknesses among its many impressive innovations. One of these is the finesse of the precision-engineered modular building shells with narrow shadow gaps between aluminium trim and the inset prefab panels. Will this delicacy of hard-to-replace, custom-made components be sustainable over the houses' 60-year lifetime, in the face of onslaughts by jobbing builders with ladders and small children with footballs, even if the vandals are kept at bay by community spirit?

The second weakness is more worrying, and that is the 1970s-style car park. Some 323 households within the first seven clusters of housing are expected to park their cars here, rather than outside their front doors. Will they banish their beloved cars to the communal car park in the name of urban renaissance, or will they revert to the motorist's traditional sod-you attitude? This partly depends on drivers being weaned from their cars by an efficient bus service. Unfortunately, one of the ambitious initial proposals that has been "whittled away" is a guided bus service to North Greenwich underground station.

But the real test of the village will be how well it goes down with the punters. Last March, 95 of the first 100 flats in the nine-storey block were sold at prices of £215 000, on the strength of a ground-level show-flat – and that one year before completion on a windswept former scrapyard in industrial east London. These punters were bold enough to defy the curse of the dome.