Prescott faces fury over cheap homes

John Prescott was dubbed "economically illiterate" today after he ordered a dramatic increase in the number of lowcost homes in the centre of London.

Westminster council reacted furiously when the Deputy Prime Minister used his planning powers to demand that every housing development had to make half its homes "affordable".

Mr Prescott's action, which gives legal force to a similar target suggested in February by Mayor Ken Livingstone, is the toughest restriction imposed on any authority.

Tory- run

Councillor Robert Davis, Westminster's cabinet member for planning, said the decision was "astonishing" and threatened legal action to resist it.

Mr Prescott's ruling was announced by the Government Office for London as Westminster was due to adopt its new blueprint for the borough tonight. The ruling requires the council to increase the proportion of affordable housing at each development from 30 to 50 per cent. Mr Davis said this would actually reduce the numbers of cheaper homes built.

"This decision shows a complete lack of sensitivity to the needs of central London and could see many developers deciding that residential building in the area is simply not worth their while," he said. "It is economically illiterate. It is the most extreme housing policy to be imposed anywhere in the UK. We will take advice on whether to make a legal challenge."

But the Mayor hailed the ruling as a breakthrough for those who could not afford market prices. "This backing from central government of a key policy in my London Plan is hugely welcome," he said.

"As a result we will see many more affordable homes built in Westminster for key workers and those in housing need.

"It sends out a clear message that every council in London must play its full part in meeting the need for new affordable homes."

A spokesman for the Deputy Prime Minister said Mr Prescott had modelled his decision on Mr Livingstone's target.

The Secretary of State can order changes to a development under the Town and Country Planning Act 1990 - although that power has rarely been used.