Council tenants' right-to-buy discounts are to be slashed in 42 areas of England, the government has announced.

The move follow complaints that both tenants and companies have in some cases exploited existing rules to make big profits.

What this is going to do is effectively put a penalty of �20,000 plus on some of the poorest people David Davis Tory spokesman

For example, some flats in property hotspots have allegedly been let out at market rates while landlords benefit from an effective state subsidy in property prices.

The Conservatives say they want to see evidence of the abuses and have branded the government plans a "poll tax on the poor".

Deputy Prime Minister John Prescott signalled last year that London and south-east England would be targeted in any discount cut.

That followed calls from homelessness charities that Margaret Thatcher's flagship policy be suspended because it was making chronic shortages worse.

The scope of right-to-buy restrictions on resale are also to be widened to protect affordable housing in rural areas.

Mr Prescott said: "I am totally committed to the principle of right-to-buy.

Prescott: Measures needed to stop abuse

"We are not abolishing the scheme, but modernising it.

"The government supports home ownership and we are actively supporting alternative home ownership schemes, such as the Starter Home Initiative, which frees up social housing while promoting private home ownership."

'Punishing the few'

Mr Prescott's Tory shadow, David Davis, labelled the plans an "utter disgrace".

Mr Davis told BBC Radio 4's World At One: "It is punishing the many for the sins of the few.

"We have heard a lot about abuses but we have not seen any data from the government, which we would like to see.

"We would be willing to look at properly defined methods of dealing with the abuses.

"What this is going to do is effectively put a penalty of �20,000-plus on some of the poorest people in society."

Mr Davis said cutting discounts in housing hotspots would make problems worse for tenants who could not afford to buy without such help.

Conservative plans to extend the right to buy to housing associations would use revenue from the scheme to boost social housing, he argued.

Mr Davis accused ministers of "smuggling" out the announcement in a written statement because they were afraid of debate.

Wider package

That charge was rejected by Housing Minister Tony McNulty.

Mr McNulty said the plan was part of a wider package of housing measures to be unveiled "in the next couple of weeks".

Those policies would tackle housing shortages in the South-East and empty properties in northern areas.

Mr McNulty claimed the plans had been welcomed by "most people who know anything about housing".

He predicted the move would please Conservative councils in the rural areas being targeted.

Previous Tory governments had given right-to-buy exemptions to some rural areas, he argued.

Ben Jackson, from homelessness charity Shelter, called the plans an important step but said more measures were needed to counter exploitation.

"There must also be the resources to deliver the affordable homes that are desperately needed," said Mr Jackson.