But he drew a furious reaction from Labour after blaming past housing mistakes on "an essentially Socialist approach". Labour said that in the early Seventies, Mr Major had played a part in creating two ghetto estates when housing chairman of London Borough of Lambeth.
The Prime Minister said that "in my determination to improve the inner cities I am politically colour-blind". He pledged to work with private companies and local councils of all parties.
Speaking later ineast London, Mr Major gestured towards Seventies tower blocks and said: "Those dreadful old eyesores are going to disappear and be replaced with civilised and human housing." He said more than £2bn had been spent in the last decade improving the 500 worst estates and 1.4 million tenants had exercised the right to buy.
But Frank Dobson, Labour's environment spokesman, countered: "This year, the number of homes built for rent will total just over 20,000 - the lowest total since the Second World War."
Mr Major cited examples of City Challenge and Single Regeneration Budget projects where public money was "drawing in massive amounts of private sector investment".
The Association of London Authorities said: "What we need is an increase in grants to local authorities and associations and the release of capital receipts from the sale of council housing," and the Labour-controlled Association of Metropolitan Authorities said the speech was "meaningless rhetoric".
Mr Major's speech came ahead of a Government White Paper due in June, which will look at extending home ownership, increasing tenants' rights to buy their homes and stimulating private sector involvement in urban regeneration.
Conservative Central Office pointed out last night that Ken Livingstone, MP for Brent East and former GLC leader had once described the Prime Minister as the architect of a humane and progressive housing policy that had put Labour's "old guard" in Lambeth to shame.
In a separate initiative, he said he would be encouraging schools, including some inner city schools, to set up pilot performance target schemes.
Meanwhile, senior Conservative Party sources said last night that Mr Major's plan to extend ownership to housing association tenants was "alive and kicking" in spite of reports that the proposal had been dropped from a housing white paper to be publ
The Lambeth legacy, page 2
New school targets, page 9
Leading article, page 18