Some of Britain's most deprived areas are set to receive £800 million to rebuild blighted neighbourhoods.

Deputy prime minister John Prescott announced on Tuesday that 88 local councils would get the cash over two years to improve housing and increase urban regeneration.

Prescott said the money was part of a new phase in efforts to turn around poor areas.

"We are giving local people the tools to improve their own quality of life. To kick-start regeneration by targeting services to the people and places that need them most," he said.

"Already we're turning around years of neglect that have blighted our most deprived neighbourhoods.

"Across the country, north and south, people are benefiting from efforts to reverse the spiral of decline in impoverished communities - to create places where people want to live not leave."

The announcement came as Prescott detailed plans to create affordable homes for key public sector workers.

He revealed that government departments own enough land in London to build 80,000 affordable homes for low income workers.

Prescott announced that English Partnerships, the government regeneration agency, will be ordered to establish a register of surplus government land.

"When I am told there is enough surplus public land in London to build 80,000 homes, I wonder why we are selling off prime sites to the highest bidder when we could be using it for key worker housing," he said.

The issue is set to take centre stage in the Budget on Wednesday with Gordon Brown announcing measures to meet the government's promise to provide 200,000 new homes in the South East.

Ministers are concerned that plans to recruit additional nurses, police and teachers could be undermined by the high cost of housing in the South East.

The Conservatives challenged Prescott's pledge to bring in a land register, saying it was a re-announcement designed to cover up a lack of action.

"Gordon Brown ordered government departments to compile a register of public assets, including land, back in 1997," said shadow deputy prime minister David Davis.

"Since then we have seen the number of newly-built social housing units fall by a third since Labour came to power - that's some 35,000 extra social housing units that could be available now - enough to house the number of families currently living in bed and breakfast accommodation nearly three times over."