A £1.5BN Government cash injection to tackle Britain’s housing crisis was overshadowed yesterday by a row over whether local people would queue-jump council waiting lists.

Unveiling what was dubbed an “early election manifesto”, Gordon Brown pledged the money would allow an extra 20,000 affordable homes to be built over the next two years.

Local authorities will bid for a slice of the funding, which is desperately needed to reverse soaring waiting lists for council and housing association homes.

More than 107,000 families in the region are waiting for a home, including in the blackspots of Middlesbrough (20.6 per cent of households), Hartlepool (9.5 per cent) and County Durham (8.1 per cent).

In the Commons, the Prime Minister said new rules would allow town halls to “give more priority to local people whose names have been on the waiting lists for far too long”.

Some dubbed the policy “local homes for local people”, in an echo of Mr Brown’s nowinfamous pledge of “British jobs for British workers”, which backfired badly.

But Downing Street aides quickly made clear that local authorities would still be required to give priority to the homeless and those in the most overcrowded conditions – regardless of how long they had lived locally.

Only after that responsibility had been met would they be allowed to prioritise “people with a local connection”

and “families on the waiting list for a long time”.

The extra housing cash – trebling the amount available to £2.1bn over two years – came alongside a raft of policies to give people more power over public services, in a legislative programme called Building Britain’s Future.

They included: ● A guaranteed job, work experience or training place for everyone under 25 who has been unemployed for a year; ● A threat to dock two weeks benefit from anyone refusing to “accept that guaranteed offer”, rising to four weeks if they turned down a job a second time and 26 weeks for a third failure; ● A personal tutor for children at state secondary schools, and one-to-one “catch up tuition” for those who need it; ● A guarantee of hospital treatment within 18 weeks and of an appointment with a cancer specialist within two weeks; ● A £150m innovation fund for biotechnology, life sciences and low carbon technologies.

Explaining the new housing waiting list policy, Housing Minister John Healey denied the shake-up was targeting foreign immigrants, who did not have the right to council housing.

Instead, he said: “I would like to see councils taking more responsibility for the way they design the letting policy and then manage it, so that local people feel that they have a fair chance of getting the homes.”

Bill Dixon, Darlington Borough Council executive member for housing, said he believed his authority was “ahead of the game” when it came to housing policy.

He said: “Darlington has, over the last 30 years, operated a housing allocation policy with the needs of local people always a priority.

“That being said, we do take a very limited and controlled number of asylum seekers, but they in no way affect our allocation policy.”

Conservative leader David Cameron warned that the spin on the announcement risked giving the British National Party another issue it could exploit.

He said: “Ministers should be very, very careful with the language they use, that this ‘local homes for local people’ does not become another ‘British jobs for British workers’, which did a huge amount of damage to the Prime Minister’s credibility.”

Meanwhile, Liberal Democrat leader Nick Clegg attacked the Government’s failure to give town halls the power to spend their income from rents on new homes. A review had been “grinding on since January”, he said.

The smooth launch of the policy document was also hit by Lord Mandelson apparently confirming that flagship plans to part-privatise the Royal Mail had been shelved.