Labour's eco-towns are shrinking rapidly

Labour's flagship "eco-towns" plan has been delayed amid fears that there is a lack of applicants for the housebuilding expansion.

In the latest setback, a shortlist of applicants due to be published in October will not come out until next year, it emerged today.

Ministers may be starting to back-pedal from their original target of 10 towns taking part in the scheme. The Government had a longlist of 16 applicants, drawn up in April. Three of those dropped out but it appears that three more, in Norfolk, north Yorkshire and near Cambridge, now face difficulties.

Another scheme in south Yorkshire has been reduced from 15,000 homes to 5,000. In Coltishall, Norfolk, the Government has just won permission to build a prison on the same site as the proposed ecotown. At Hanley Grange, near Cambridge, a partner in the scheme has withdrawn. In Selby, north Yorkshire, developers have been blocked by local authorities.

The eco-towns plan, for 10 communities built to the highest environmental standards, was at the heart of Gordon Brown's policy platform at last September's Labour conference. Housing minister Caroline Flint has recently begun to talk about "up to 10 eco-towns".

Admitting a delay in the announcement of its shortlist, a Department for Communities and Local Government spokesman said that most of the schemes were still going ahead and that the "proof will be in the pudding" as to which were a success.