We didn't say, you can buy your home and then become a landlord

Lord Rooker

More than a million people of taken advantage of the right-to-buy, which was a flagship policy of Margaret Thatcher's 1979 election manifesto.

But Labour claims too many people are buying council houses cheaply and then sub-letting them at competitive rates, fuelling chronic housing shortages in London and the South East.

Housing minister Lord Rooker said the scheme was open to "too many abuses" but was a sensitive issue and no final decision had been made.

The Conservatives accused Labour of signalling a u-turn on an election commitment.

'Down the plughole'

Lord Rooker told delegates at Labour's first rural conference in Newport, Shropshire the policy of selling off council homes cost Labour "millions of votes" at each general election in the 1980s.

But now councils were losing this valuable resource "down the plughole" as property prices continued to spiral.

"We didn't say, you can buy your home and then become a landlord," Lord Rooker

Ministers could prevent the right-to-buy in areas like Tower Hamlets, where council properties are bought up cheaply and then let at London prices, squeezing out teachers, nurses and other public workers on low pay.

Top of the agenda

But shadow housing minister Eric Pickles said Labour gave a firm commitment at last year's general election not to scrap the right to buy.

He said: "They have already ratted on that undertaking by removing some of the discounts.

It is clear the next stage is to encroach on the right-to-buy even further. The truth is you can't trust Labour."

Adrian Sanders, Liberal Democrat housing spokesman, said the move was an admission of failure by the Government to replace housing stock.

It is a scandal that 750,000 houses are unoccupied whilst we have an affordable housing crisis.

Adrian Sanders Lib Dem housing spokesman

He added: "It is a scandal that 750,000 houses are unoccupied whilst we have an affordable housing crisis."

In the past 20 years, 1.5 million council houses had been sold off, although there were still 2.7 million in local authority ownership.

Housing has been catapulted to the top of the political agenda, with John Prescott announcing plans last week for 200,000 affordable new homes for the South-East.