HOUSING minister John Healey last night tried to rescue the Government's eco-town project by adding an existing Westcountry development to the official list of green communities.

The Cranbrook development – which insiders had previously insisted was not an eco-town – is now among those being put forward by ministers as being at the cutting edge of environmentally-friendly living.

Mr Healey announced the site, near Exeter, will receive £200,000 for East Devon council to "develop their masterplan" for 3,500 green homes by 2016. Forty per cent of the properties will be affordable, and there is potential for further expansion to 7,500 homes.

The project joins three others in the Westcountry already developing plans for eco-towns.

Cornwall's bid is the most advanced, being among the first four fast-tracked by ministers last year after initial hopes of up to 10 were dashed by opposition elsewhere in the country. The St Austell development is based around six former clay mines.

Cornwall council is hoping to use the scheme as a catalyst for greener homes across the country. Mr Healey yesterday announced funding of up to £500,000 for the council to work towards ways of reducing the environmental impact of all new homes.

In Somerset, two schemes are also included in the second wave of eco-towns. Some £1.5 million has been allocated to fund work towards "achieving eco-town standard in an urban eco-village and an eco-extension" on the edge of Yeovil.

And a 5,000-home development at Monkton Heathfield near Taunton has received an extra £630,000 to support development of detailed proposals for sustainable transport, renewable energy and green infrastructure.

Mr Healey said: "Councils are making great progress and already highlighting where they can apply tough green standards in new development. This signals real and radical momentum to change and to re-think how we design our towns and homes for the future."

Ministers also unveiled an overhaul of planning policies to help ensure green measures such as electric car charging points and renewable energy schemes get the go-ahead in new developments.

In total there are now 11 local authorities developing plans for a second wave of environmentally-friendly new settlements and sharing a £10 million pot to help them bring forward their proposals.

But Tory shadow housing minister Grant Shapps said yesterday's announcement was "a big green fig leaf to hide Gordon Brown's embarrassment".

"He boasted about creating 10 so-called eco-towns, but they've never materialised. All Labour Ministers have done is given some existing planned development a good green wash."

The update of planning regulations for climate change, coastal change and the natural environment will provide a "green planning rulebook" for councils to help them tackle climate change.

The policy, coming a week after the Government launched a green homes strategy putting emphasis on the role of councils in improving energy efficiency, will allow town halls to use the planning system to establish community heating and energy sources.