In a speech to the Labour Party conference in Manchester this week, housing minister Caroline Flint indicated that the government will "not admit defeat" over the housing plan, even as the economic slowdown bites.

Gordon Brown has placed housing among his top priorities, with a target of building 3 million homes by 2020 frequently mentioned. That target would require an average of 240,000 new homes a year, a figure that will not be met this year at least. This year's sharp contraction the construction industry has led to warnings that the target will not be met at all.

Amongst the sceptics, the National Housing Federation (NHF), representing public housing associations, claimed that the 2020 target is now "almost impossible", with the disappearance of developers and increasing caution on the part of buyers.

The minister said: "Despite the downturn, we will not reduce our ambitions. Britain needs more homes. We won't give up that easily. Labour will build the homes Britain needs."