Liberal Democrat deputy leader Simon Hughes today warned the Prime Minister that fixed-term council tenancy agreements "in no way represent the policy of the coalition".
Mr Hughes said David Cameron's ideas for ending "council houses for life" had not been discussed within the coalition and "certainly do not represent the policy of Liberal Democrats".
He said the party would be willing to talk about the suggestion but warned that MPs would "not be backward in expressing our personal and collective views".
Mr Cameron floated the idea at a public question and answer session in Birmingham yesterday.
He said there should be "fixed-term" tenancy deals so residents could be moved on after "five or 10 years" if their circumstances change - rather than living in a council home "forever".
In a statement, Mr Hughes said: "Council tenancy agreements have not been discussed by the coalition, and any idea or proposal floated so far is nothing more than that - an idea or a proposal and not a policy.
"So the ideas put forward by David Cameron this week in no way represent the policy of the coalition and certainly do not represent the policy of Liberal Democrats. There was no mention of this issue in either election manifesto or the coalition agreement.
"All Liberal Democrats will continue to support stable and cohesive communities where people have the security of knowing that they will continue to have a home. We will not let anybody have their homes taken away."
He said the biggest housing priority should be "urgently to increase the supply of good quality, energy efficient and secure homes".
"Of course Liberal Democrats are willing to talk to our coalition partners and anybody else about any ideas for council housing," he added.
A spokesman for Deputy Prime Minister and Lib Dem leader Nick Clegg said Mr Cameron's suggestion would be discussed within the coalition.
"The Prime Minister said it was an option but it hasn't been agreed," the spokesman said. "(He) was at pains to point out that it was a proposal.
"There are a lot of issues regarding tenure, there are arguments on both sides. But clearly it throws up a lot of potential problems.
"We need to understand exactly what the proposals are."
Labour seized on Mr Hughes' comments, pointing to them as evidence of a split in the coalition.
Former Cabinet minister Bob Ainsworth said: "Proper government can't be conducted if Nick Clegg isn't speaking for the Government from the despatch box and David Cameron isn't speaking for the Government at a question and answer session.
"Clegg and Cameron need to stop giving different answers to different audiences for party political advantage, as has always been the Lib Dem tactic."
Mr Hughes' comments came as the Government released more details of plans to reform social housing.
A national scheme is being introduced to connect tenants in different areas who are keen to swap properties for employment or personal reasons.
Housing minister Grant Shapps said the initiative would help resolve the "contradiction" where a quarter of a million families lived in overcrowded accommodation, while more than 400,000 homes were larger than the occupants needed.
A number of councils already run successful exchange systems, but under the new proposals, all eight million council and housing association tenants across England would be able to put their names forward for the National Home Swap Scheme.