Downing Street has dismissed press claims that ministers are planning to force home sellers to pay stamp duty.

The prime minister's official spokesman told journalists on Tuesday that the story was "complete blather".

The idea was floated at a seminar by Barry McCormack, who next week will start as chief economist at the Department of Health.

His idea was that home owners would be charged a graduated stamp duty which increased the longer that they lived in the property.

McCormack argued that this would counter the rising number of people who build extensions onto their homes rather than move as the option is cheaper.

To compensate the tax on buyers should be cut, he recommended.

But Downing Street swiftly slapped the adviser down - in effect telling him to concentrate on health issues.

"This is complete blather. Taxation policy is a matter for the Treasury not the Department of Health," said the spokesman.

The idea was not being considered by anyone in government, said Number 10.

Adrian Sanders, the Liberal Democrat housing spokesman, called on the government to deal with the more pressing issue of the shortage of houses on the market.

"There is too much money chasing too few properties. There is a shortage of properties, either for sale or rent, at affordable prices," he said.

"What Britain needs are more properties on the market, not a nonsense plan like this."