Government proposals to hand more control over provision of affordable housing to councils could be a poisoned chalice, according to the LGA.

This week, housing minister,Yvette Cooper, announced plans to launch Local Housing Companies (LHCs), described as ‘radical partnerships' between councils and the private sector.

Councils will have an influence over how the surplus land they sell off is used. It means authorities could offer thousands of affordable housing deals to help first time buyers and key workers.

This follows Ms Cooper's announcement the previous week of plans to plough £510m into councils and communities, building new houses and bringing empty homes back into use.

Fourteen councils, including Leeds, Manchester and Bristol city councils, have expressed an interest in the scheme, and have been issued with guidance for establishing LHCs.

‘This is a new way to help councils do their bit to support new homes for key workers and families in their areas,' said Ms Cooper.

But the LGA said councils were being put under mounting pressure to meet housing targets at a time when the Government was launching its Climate Change Bill.

‘With the construction and operation of buildings responsible for more than 60% of the UK's energy use, councils are facing the twin challenges of building more houses while reducing their impact on the environment,' said an LGA spokeswoman.

The chairman of the National Trust, Sir William Proby, has slammed the Government's house-building target of 240,000 a year, and threatened to buy up greenfield land earmarked for development to stop new houses being built.

Natural England, the Government's environmental advisory board recommended areas of England's green belts should be built on to satisfy housing needs.