New plans reveal that flat owners will not have to pay to remove dangerous cladding from lower-height buildings after a major climbdown of government commitments.

The government will seek an extra £4bn from property developers to fund the removal of dangerous cladding, it has been reported.

The housing secretary Michael Gove is expected to announce today that leaseholders in buildings between 11 and 18 metres tall will no longer have to take out loans to cover the costs.

Instead, a Treasury letter reported by BBC Newsnight suggests he will threaten tax or legislation to pressure developers to cover the costs facing leaseholders, with no more money coming from the government.

Currently only leaseholders in buildings taller than 18 metres can currently access grants to replace unsafe cladding under measures introduced in England after the Grenfell Tower fire killed 72 people in 2017.

The letter from chief secretary to the Treasury Simon Clarke to Gove said loans for smaller buildings would be replaced by a “limited grant scheme”.

It states: “You may use a high-level ‘threat’ of tax or legal solutions in discussions with developers as a means to obtaining voluntary contributions from them.

“I am pleased to see that you acknowledge the principle that the taxpayer should not be on the hook for further costs of remediation. To reiterate, my approval of this new package for 11-18m buildings is therefore conditional on no further Exchequer funding.”

The move has been cautiously welcomed by housing campaigners and MPs.

Giles Grover, the co-leader of the End Our Cladding Scandal campaign, said it was “another step in the right direction” but that they needed to see the detail as well as action on the ground.

“You can talk about extra funding and positive steps but it’s taking so long to make the buildings safe,” he added.

Another campaign spokesperson, Paul Afshar, said he also welcomed the news but said the “devil’s in the detail”.

“Obviously it’s welcome news. I myself live in a building that’s under 18 metres and previously there was nothing in place in terms of financial support … I’m cautiously optimistic about it. We need to see the exact detail on it in terms of the scope of what it’s going to cover and how much money is going to be put aside.”

Steph Pike, a lawyer, leaseholder and campaigner, tweeted: “This is another announcement with no real substance. How is Gove going to ‘make developers pay’ without legislating for it? What about non-cladding fire safety defects? Who pays for them? More spin. More words. No real action.”

Peter Bottomley, a senior Conservative MP and co-chair of the all-party parliamentary group on leasehold and commonhold reform, urged the government to go further.

“From what we’re hearing, progress is being made – it’s not enough,” he told BBC Radio 4’s Today programme.

A department for levelling up, housing and communities spokesperson said: “We would not comment on speculation.”