Housing minister Yvette Cooper is set to announce a green paper promoting the return of council house building by local authorities, it has emerged.

The Independent has reported that Ms Cooper has discussed the move with ministerial colleagues, stressing that rather than returning to the estates of previous decades, councils will be able to commission more homes suitable for families.

It is hoped that, through the green paper’s proposals, many first-time buyers will be able to gain a foot on the housing ladder, since councils will be encouraged to build a wide range of affordable properties and offer them on a range of terms, for instance allowing for partial ownership.

One former minister told the publication that it was the biggest change to the sector since Mrs Thatcher introduced the "right to buy".

The post of housing minister was newly created last week as part of prime minister Gordon Brown’s cabinet reshuffle and now heads up a separate department Communities and Local Government.