Chancellor George Osborne unveiled the controversial idea to relax planning rules as he reiterated the Government’s plan to boost construction of infrastructure and new homes.

Osborne told BBC ‘s Andrew Marr Show this weekend that Government would encourage councils to allow developers to build on the Green Belt if an equivalent area of land elsewhere was redesignated.

“I think we can speed up planning. It is absolutely ludicrous that it takes years to get planning decisions in this country. This country, in the current economic environment, cannot afford to wait years for development,” he said.

He defended his record underlining the government’s plan to speed up construction with new legislation this autumn to underwrite £40bn of infrastructure projects and up to £10bn of new housing.

The new Infrastructure (Financial Assistance) Bill, which builds on the scheme  first launched in July, will use government guarantees and access to low interest rates to underwrite stalled major projects.

Qualifying projects must be “nationally significant” and ready to start construction within 12 months.

He said the Government also had fresh plans to underwrite construction of up to £10bn worth of new homes, including guaranteeing the debt of housing associations and private sector developers.

Labour seized on the weekend’s announcements warning the government’s decision to re-write planning rules just six months after it introduced a new framework, would create uncertainty and deter investment.