The government is pushing ahead with a new round of funding for its controversial social housing redevelopment programme.

Some 38 local authorities are bidding for the latest round of funding, which allows publicly owned housing to be brought up to modern standards.

Labour backbenchers and party members have criticised of the programme on numerous occasions because it prevents councils from retaining direct control of their housing stock.

Instead, councils and tenants must chose one of three options. Firstly, they can transfer of the property to arms length management organisations, which are companies owned by the council to manage its homes.

Alternatively, the private finance initiative can be used to raise cash, with the property still owned by the council but in most cases being managed by the private sector.

The third option involves the transfer of homes to a non-profit making housing association, which can borrow money outside the public expenditure constraints.

Using these three schemes, and some £3.9 billion of funding, ministers are hoping to bring all social housing up to a decent condition by 2010.

Housing minister Keith Hill said: "The government has so far reduced the number of non-decent homes in the social sector by one million since 1997 and reduced the number of vulnerable households living in non-decent homes in the private sector by 130,000.

"The decent homes standard is not only a vital part of the sustainable communities agenda but importantly will also contribute towards dealing with child poverty and fuel poverty."