Milburn wins right-to-buy battle

Alan Milburn has won a Cabinet battle over plans to give housing association tenants the right to buy their homes.

The controversial policy will be the centrepiece of the five-year plan unveiled by John Prescott's department next week.

Labour's election chief, Mr Milburn has championed the extension of the right-to- buy scheme - which would affect up to 700,000 tenants - in the face of reported opposition from Mr Prescott and Gordon Brown. But the Treasury has now agreed to allow housing associations to borrow "off the balance sheet" to fund the cost of building replacement homes.

The Treasury decision will be seen as significant victory for Mr Milburn, who wants Labour's election campaign to target "aspirational" voters.

Mr Prescott's plan will also include allowing the building of 60,000 starter homes which will be offered to first-time buyers for as little as ?50,000.

The homes will be built on government-owned land in London and the South-East. To keep costs down, the government would retain the freehold.

First-time buyers will also be offered the chance to buy a stake in 100,000 new homes. Buyers would pay a proportion of the mortgage with the

remainder funded by housing associations or other organisations. Ministers believe this would help first-time buyers who do not enough money for the deposit on a house.

The five-year plan is also expected to set out plans to extend elected mayors to other major cities in Britain. Downing Street believes cities such as Birmingham, Manchester and Liverpool could benefit from having a Ken Livingstone-type figurehead.