The average first-time deposit is �24,500, Mr Cameron claimed

The plan would be a successor to Mrs Thatcher's "right-to-buy" scheme which led to a "huge change" for 2.5 million people in the '80s, David Cameron said.

It was a "natural aspiration" to own property and it was wrong for it to be out of reach for many people, he added.

The 320,000 first-time buyers last year was the lowest since 1980, he claimed.

The average first-time deposit of �24,500 and increases in stamp duty had led to a decline in homeowners, Mr Cameron said.

"There are fewer of them, they're getting older and they're getting poorer."

However, "the dream of a property-owning democracy is as good today as it was in the 1980s", he said.

He is to ask his party's internal Public Services Revenue Group to assess the feasibility of the change for those living in local authority or housing association property.

People know there is a need for new homes - they don't want their kids to be priced out of the market, they don't want their local school to close, they don't want to live in dying communities David Cameron Conservative leader

Mr Cameron conceded that his intention to "create a whole new generation of homeowners" would reduce the stock of social housing, and this would need to be addressed.

But the advantage was that millions of people would acquire "an asset for their lives".

He also called for the planning system to be altered.

"People know there is a need for new homes - they don't want their kids to be priced out of the market, they don't want their local school to close, they don't want to live in dying communities," he said.

"But nor do they want to be overwhelmed by a rash of ugly, insensitive developments built on the back of some bogus consultation."

He was speaking at the launch of the party's one-day first-time buyers' summit.

'Muddle'

However, housing minister Baroness Andrews said Mr Cameron's policies were "nothing but a muddle".

"They do nothing to increase our housing stock or meeting housing shortages, as he himself recognises."

She added: "They do nothing for the thousands of first-time buyers desperate to get into the housing market."

For the Lib Dems, housing spokesman Dan Rogerson suggested it would be better to give communities the power "to come up with innovative solutions to their housing problems" and not just "recycle old Thatcherite policies".

"Simply extending 'right-to-buy' would only diminish the supply of social housing and do nothing to tackle the real issue, which is the shortage of decent, affordable homes," he said.