Landlords who own empty homes which they refuse to modernise could have them forcibly seized by councils and leased to low-income families, under plans announced by John Prescott, the Deputy Prime Minister.
The Deputy Prime Minister told delegates in his main conference speech that councils would receive powers to lease empty properties "from landlords who cannot, and will not modernise them ... They can then be brought back into use."
Reviving rundown areas was one way to stop the "cancer" of the far right spreading throughout Britain, Mr Prescott said. Streets full of abandoned houses were "breeding grounds for criminals, drug dealers and rip-off landlords", he said, and they were also "breeding grounds for the likes of the racist BNP".
He also hit out at spiralling council tax bills, issuing a warning to town halls which have hiked their council tax that he will impose a ceiling if they try to raise them further. Forty to 50 per cent council tax rises were "unsustainable", Mr Prescott said, and councils which tried to impose such rises had "cheek".
He pledged to take action against councils which lower taxes as a "pre-election gimmick" ahead of next year's local council elections but then increase them after the poll.
"Some councils have the cheek, and yes I call it cheek, to hike up their council tax - after receiving large grant increases - and then blame the Government," he said.
"I abolished the Tories' crude and universal capping, but I did retain reserve capping powers and I will, if necessary, use them in a targeted way on those councils that make unreasonably large council tax rises."
Mr Prescott also announced an extensive public building programme to help people on low incomes get on to the property ladder.
He said 1,600 new "affordable" homes would be built on government-owned land in the south-east of England.
The Government had already met its target of building 60 per cent of all new homes on unused industrial land, he said.