But the housing minister Lord Falconer told Saturday's Daily Telegraph it will be implemented urgently nationwide.

It's comfortable, beautiful housing

Lord Falconer Housing Minister

Figures released earlier this week by Nationwide suggested house prices rose by 3.4% last month.

Workers have complained they are being forced out of big cities, especially London, because they cannot afford to live there.

Lord Falconer told The Daily Telegraph: "School teachers or health workers now cannot afford to live near where they work and therefore don't work there.

He added: "It's comfortable, beautiful housing. I would like to see thousands built a year."

Hackney model

The minister said the government would release publicly-owned land for free.

His announcement follows a government pledge to give �250m to help key workers buy their first homes.

A pre-fab home was unveiled at the Ideal Home Exhibition

Lord Falconer said he is considering setting up a body to oversee the emergency housing package.

A �4m project is under way in the capital, backed by London Mayor, Ken Livingstone.

A prototype from this initiative was unveiled at the Ideal Home Show in March.

But the concept goes back even further.

Two years ago in Hackney, east London, the Peabody Trust erected one and two-bedroom flats which are offered to low-paid workers to rent.

The homes were built and fitted in York and transported to Hackney.

Rent is as low as �140 a week - just above half the price of the equivalent in the same area.