A report by a professor at the LSE who advises the government has claimed house builders have a "terrifying sway" over the government.

Anne Power's study on urban living concludes the government's latest housing initiative amounted to abandoning poor areas and making richer areas richer.

Meanwhile, councils have warned that John Prescott's plan to create a series of new urban developments in southern England will not work unless the cabinet agrees to earmark billions of pounds for new roads and rail services, hospitals and schools.