There are not enough houses in the south-east and "too many misery estates" in the north, said the deputy prime minister today.

Confirming leaks, John Prescott revived controversial plans to limit the tenant's right to buy council houses in "designated housing crisis areas".

Heralding a "step change" in housing, Prescott told Labour conference that new and better homes were at the top of his agenda.

"I will be announcing to parliament in the new year a radical programme - a step change in housing for this country," he told Blackpool delegates.

Prescott admitted "governments of both sides have failed on housing for decades".

"We have simply not built enough homes. And there are too many misery estates," he said.

The government has identified "different housing problems in different parts of the country".

In London and the south-east ministers are focusing on "the desperate shortage of affordable homes".

Prescott dismissed environmentalist concerns on overcrowding and the greenbelt. "Some people are saying that you don't need any more homes in the south-east," he said. "Don't need them?"

"Tell that to the people who can't afford to live and work near their families. Tell it to the nurses and teachers who are forced to leave jobs because they can't afford to live anywhere near their work."

Housing shortages, warned Prescott, meant that the government must re-think the "right to buy".

"In these areas of severe housing shortage, the right to buy is denying families the right to a home," he said.

"Now I am not saying we will end the right to buy. No one is seeking to turn the clock back. but the right to buy undermined and in some cases continues to undermine social housing in designated housing crisis areas."

Reports indicate that the right to buy is being abused by property speculators taking advantage of soaring house prices in the south-east.

The deputy prime minister said it would be irresponsible "not to act" where public services are hot by some taking advantage of housing shortages for personal profit.

"In those\areas where exploitation and abuse of the system exist, when people suffer as a result, when our public services are undermined, and where the right to buy undermines the right to live in decent conditions, it would be irresponsible not to act," he cautioned.

The right to buy announcement was welcomed by the homeless charity Shelter.

Ben Jackson, the organisation's director of external affairs, said: "Prescott's commitment to reform the right to buy is particularly significant for the thousands of families forced to live in appalling conditions due to the chronic housing shortage.

"His statement clearly goes beyond curbing abuses to the system and recognises the desperate need to change the policy in areas of severe housing demand to ensure the haemorrhaging of affordable homes is quickly halted.

Last year over 15,000 homes were sold through the right to buy in London and the South East alone."

Prescott also painted a grim picture of rundown "misery estates" in the north of the country.

"Streets of good post-war houses are being knocked down because there's no one to live in them. People, trapped in negative equity, are living in run down estates," he said.

In these areas unscrupulous landlords are fuelling social tensions, and Prescott served notice on "new rip off Rachmans".

"In [these] most vulnerable areas, unscrupulous landlords - the new Rachmans - are starting to appear. They run down the houses, they exploit loopholes in the housing benefit system to turn a profit, they rip off tenants and they rip off the public.

"And what's worse they create a breeding ground for the likes of the racist BNP," he said.

"To those landlords I hereby serve notice: we are going to bring your days of exploitation to an end."

Prescott trailed the creation of a new housing inspectorate under the auspices of the Audit Commission to police standards in housing association and public homes.

And he said the Housing Corporation would play a much "bigger part" and be key to a drive to provide 250,00 extra home sin the south-east.

Areas of the north, streets of good post-war housing being knocked down as "demand collapses" - negative equity and rundown estates.