Reports that Tony Blair has intervened over proposals to build 1.1 million homes in the south-east by 2016 - possibly 150,000 of them in Essex - have been welcomed with a sigh of relief in many quarters.

Mr Blair is said to have called for a review of economic and social projections used by a panel of inspectors inquiring into regional guidance put forward by SERPLAN, the consortium of London and south east planning authorities.

The panel's findings, known as the Crow Report, could involve Essex having to build at the rate of 7,500 homes a year.

It is suggested that ministers are becoming increasingly concerned about the north-south divide, with more and more pressure being put on the south east, to the detriment of both this region and areas further north, where opportunities could be neglected.

A spokesperson for the Department of the Environment, Transport and the Regions confirmed that the Prime Minister had made the request for further information.

She said: "We want to emphasise that the Secretary of State is not bound by the panel's recommendations. John Prescott will be making a response in the New Year."

The move is generally being interpreted as good news for Essex.

Pat Amos, policy manager with Essex County Council, said, "We are pleased that Tony Blair has asked a number of government officials to re-examine the scale of housing which is proposed in the region, and that they are looking at the balance between regions in terms of economic development. Hopefully this will result in a reduction in the housing requirement."

Derek Stebbing, local plans manager with Chelmsford Borough Council, said, "This is potentially a move in the right direction. The fact that the Prime Minister had become involved was an indication that it was a national, and not just a regional, issue. We welcome this," he said.

Cllr Paul Sztumpf, chairman of Essex County Council's planning committee, said, "I suspect in the Cabinet there is a growing feeling that Crow has an impact on the nation as a whole because it envisages in-migration to the south-east.

"While we in the county accept we have to meet our own locally generated housing needs I think we should resist further in-migration to the south east."

A spokesman for Essex County Council's Liberal Democrat group said "The fact that they are looking at it is obviously encouraging.

"The important thing is that we don't let up and continue making the argument and get the message across that the proposals Crow put forward are unsustainable for Essex."

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