The government plans to give the green light to two million new homes over the next decade in a bid to reduce house price inflation, the deputy prime minister has announced.

In an interview with the Observer on Sunday, John Prescott admitted that the move, which will result in between 220,000 and 260,000 new homes being built each year, was "one hell of a target".

"The most important thing is to get the numbers up," he said.

"And to get houses that people can afford. There has to be a step change, and that means changing the delivery mechanism.

"We need to keep sustainability in housing and get a more moderate increase in prices. We inherited a growing crisis in housing: prices...roaring ahead faster than earnings, and people's ability to pay."

He went on to attack the planning system for being "too conservative" and developers for being obsessed with building "executive homes".

The deputy prime minister insisted that while the bulk of new housing would be privately bought, tens of thousands would be used as "social housing" for public sector workers.

While he insisted that new houses in the south and south east would take up "less than one per cent" of the available land, the aim is to have built a city twice the size of Birmingham by 2010.

However, Prescott has come under fire from environmental groups after admitting that some new homes would have to be built on greenfield sites.

"The argument is that if we double house building that will have a substantial impact on house prices," said Nicholas Schoon of the Council for the Protection of Rural England.

"But prices are as much affected by speculation and low interest rates as supply."

Prescott rejected the criticisms.

"They [rural groups] are always shouting about that," he said.

"What are they suggesting? That I say to people in the south east they catch the train to Hull where they are knocking down houses?

"We do not want a situation in the south east that forces people to move out of that area and not live with their families."