A plan to build thousands of homes in the South East has serious faults, a committee of MPs has warned.

A £20 billion plan unveiled by the deputy prime minister to build 200,000 homes around Ashford, Milton Keynes, the Thames Gateway and Cambridge corridor is "unsustainable", the Commons committee on the Office of the Deputy Prime Minister said.

The wide-ranging review highlighted problems across a range of issues related to the plans unveiled by John Prescott.

Potential buyers who cannot afford to live in London could be forced to live in "characterless urban sprawl" and officials have failed to consider the cost of providing the schools, roads and hospitals needed to support the developments.

"We are far from convinced that the government's plans will be sustainable," warned committee chairman Andrew Bennett.

"It could create characterless urban sprawl serving commuters into London, rather than vibrant communities with affordable homes, jobs and leisure facilities, which the government wants."

If Britain's housing problems are to be solved, the government will also have to take on the imbalanced economic divide between North and South, the committee said.

There was also a warning that the proposals would be unlikely to have any impact on the spiralling house prices seen over recent years.

MPs predicted that the shortage of brownfield sites in the South East meant ministers were in danger of opting for greenbelt sites that are less complex to develop despite the cost to the environment.

"The impact on the environment does not appear to have been considered. Even basic issues like how the water can be supplied to all the new homes in one of the most arid regions in the UK have yet to be resolved," said Bennett.

Rather than building massive estates on the edge of towns and cities, MPs believed the focus should instead be on small developments in existing places that could bolster attempts at urban regeneration.

"Small development sites can help make an area sustainable, even though they will make only a limited contribution towards achieving ambitious house-building targets," the committee concludes.