Households could receive State compensation if their home is blighted by a new garden city being built close by.

Deputy prime minister Nick Clegg said that such households could get council tax rebates during construction, or sell their homes to the State at a guaranteed price.

The Government is currently suggesting that just three garden cities, maximum, could be built in the south-east, each consisting of a minimum of 15,000 homes – potentially, very small cities.

The figure of three compares with the 27 new towns built across the UK post-war.

Locations of the up-to-three new towns have not yet been selected, but Clegg told the Sunday Telegraph he hopes to have a shortlist of locations by the end of this year.

Clegg told the paper: “Many people will want to live in world-beating garden cities.

“The point of them is that they must be well-designed, support jobs, contain top-quality green space and services – the best of town and country in one place.

“But we also need to make sure that no individuals lose out during the development.”

The three garden cities could potentially contribute 45,000 new homes over a period of time, with up to £2.4bn being made available for those being built up to 2020.

Last year, 109,370 new homes were completed in England, compared with the 200,000-250,000 that are generally reckoned to be needed.