John Prescott has said the government will offer "choice, opportunity and fairness" in the housing market, with extra help for first time buyers.

In a Commons statement, the deputy prime minister said that problems in the housing market had lasted for decades.

And he pledged more help for first time buyers and key workers.

But the Conservatives said the government had allowed problems in the housing market to "spiral out of control".

Prescott told MPs that the five-year plan for homes would help 80,000 people into home ownership by 2010.

A new "Homebuy" scheme will allow council and Housing Association tenants to buy a stake in their home.

And proceeds from Homebuy sales are to be re-invested in housing.

There will also be a competition to build a home for £60,000, as the government seeks to deliver quality homes at lower costs.

"We are offering the most comprehensive, fair and flexible policies ever to deliver sustainable homeownership," said the deputy prime minister.

"It means more first time buyers, more people in social housing and more key workers like nurses and teachers being able to get on to the housing ladder."

Out of control

Shadow local government secretary Caroline Spelman said the crisis "has spiralled out of control".

And she said the problems were "largely of the government's own making".

"Labour has made a whole series of cuts to the Right to Buy, by slashing discounts, hiking the minimum sale price and increasing the qualification period," she said.

"The average discount has failed to keep pace with the rise in property values, making buying a home impossible for thousands of council tenants.

"Housing association tenants do not currently have the same right-to-buy as council tenants and Labour’s proposals today for a 'social homebuy' scheme will not allow people to buy their own home outright."

She said the Conservatives would offer "the right to buy for all".

Three-pronged plan

Earlier, Tony Blair said that ministers will adopt a three-pronged strategy for dealing with Britain's housing problems.

The prime minister admitted that rising house prices over recent years had meant it was "very, very tough" for some people to buy a house.

But he said the government was determined to "give people a stake in our society, the chance to own their own home".

Under the latest strategy, action to ease the housing crisis is to be taken on three key fronts.

There will be more help for first time buyers, and extra assistance for key workers who find their lower salaries make it impossible to buy a house in parts of the UK.

People will also be given more flexible ways of buying their own home, helping people "to acquire an equity stake in their house that they can build over time".

And action will be taken to increase the housing supply, although the prime minister was quick to insist that this would be done in a carefully controlled way.

Under the proposals some 70,000 new affordable houses will be built.

The proposal have been criticised by the Liberal Democrats, who claim it amounts to "the slow death of social housing". 

But Prescott wants more affordable homes in the South East of England as the region's economy continues to grow.

He is facing some opposition from Tory led councils in the area who want to preserve their green spaces.