Prescott unveils £330m housing development plan

Deputy PM announces programme of regeneration between east London and the coast along high-speed transport corridor

A forty-mile "linear city" stretching east from London along the Thames estuary will be created over the next 13 years under plans unveiled yesterday to build 120,000 new homes to relieve the housing shortage in the South-east.

John Prescott, the Deputy Prime Minister, announced a £330m programme of regeneration and transport work to allow the massive wave of housebuilding. He unveiled five areas earmarked for development along the Thames Gateway: east London; Greenwich and Woolwich; Barking Reach; Thurrock and north Kent-Thameside.

Mr Prescott predicted the development would "lever in" private investment of up to £2bn and create 180,000 jobs. Ministers plan a string of road and rail projects to open up derelict "brownfield" sites for housing. Some £600m has already been committed to transport projects in the area.

Mr Prescott said: "We see economic logic in concentrating growth around high-speed transport corridors such as the Channel Tunnel rail link. To the north of London, new development will also be well served by transport investment being made in upgrading the west coast main line, new rolling stock for the Midland mainline, early interchange with the Channel Tunnel rail link at St Pancras and King's Cross, additional investment in the M1 and M11 ... We will ensure that schools and hospitals are in place as part of the development plans."

Government spending will include extensive flood defence work as well as projects to clean up contaminated land.

The package includes £130m for projects at the London end of the Thames Gateway, including Stratford, the Royal Docks, Greenwich, Woolwich and Barking Reach; £100m for north Kent; £91m for south Essex and the creation of urban development corporations in Thurrock and east London.

In separate announcements, Mr Prescott also earmarked funds for three other growth areas: Milton Keynes-South Midlands; the area between London, Stansted and Cambridge; and Ashford in Kent.

Tony Winterbottom, director of development and regeneration at the London Development Agency, said: "This underlines the Government's commitment to the area and will strengthen London's chances of hosting the 2012 Olympic Games."

Environmental groups were unconvinced and urged caution. Paul de Zylva, campaigns co-ordinator at Friends of the Earth, said: "This plan is short on detail and long on wishful thinking. Mr Prescott is promising eco-friendly, low-cost housing in new communities, well-served by decent public services and local jobs. If he can pull this off, Prescott will have deserved his place in political history. But there are real risks. The Government must now show it can deliver. The alternative is an environmental and traffic nightmare which fails to meet the affordable housing need."

The proposals were criticised by the Conservatives. David Davis, the shadow Deputy Prime Minister, said: "Low employment areas with inadequate infrastructure and transport links will not create sustainable communities. It will create high-stress dormitory towns to the detriment of the quality of life of local residents."