The plans would supporting the Government’s growth plans to find alternative funding to support a building of more homes, roads or high speed railways.

Pickle’s proposals would potentially allow councils to double the amount they can legally invest from their pension funds directly into key infrastructure projects.

The Local Government Pension Scheme England and Wales is administered by 89 separate local funds that hold combined investment assets worth £150bn.

Pension fund rules are there to make sure investment risks are spread across different types of investments to give taxpayers long-term protection. Fund managers are currently limited in the amount they can invest via partnership arrangements, which includes many types of infrastructure investment.

Proposals out for consultation today include raising the limit of 15% to 30%, giving them the scope to inject up to £45bn in projects.

Eric Pickles said: “Unlocking Town Hall pension pots so they can be used to invest in vital infrastructure projects is a common sense decision that will help this country complete on a global scale and get Britain building.

“By lifting the restrictions controlling local pension investments councils could pump a further £22bn directly into job creating infrastructure projects that will boost our economy.

A report by the Future Homes Commission earlier this month said council pension funds could be used to build key infrastructure projects like new homes in the UK without increasing the government deficit.