The deputy prime minister will today climb down over planning proposals to allow parliament to approve major infrastructure construction projects, such as motorways or airport runways.

John Prescott will tell the Commons that he has ditched measures to streamline the planning process and speed up schemes such as Heathrow's Terminal Five.

The planning overhaul had generated stiff opposition from MPs and others concerned that the reforms would bypass local communities.

But business will be angry if the U-turn means that construction projects continue to face lengthy delays.

Prescott will also announce the biggest investment in housing for 25 years, with 70,000 to 90,000 affordable homes scheduled to be built by 2006, following the Comprehensive Spending Review.