This article is more than 2 years old

This article is more than 2 years old

Labour has taken the unprecedented decision to ask one of its London councils to rethink its controversial plans for a public-private housing scheme.

The national executive committee (NEC) voted unanimously to call on Haringey council, led by Labour’s Claire Kober, to reconsider the plans to go into partnership with developer Lendlease to build 6,400 new homes in the borough.

The scheme, known as the Haringey Development Vehicle (HDV), was approved in July by the council, which has promised to replace existing council houses and rehouse current tenants.

But its critics say the HDV would bulldoze existing council estates without effective guarantees that existing tenants would be able to return, and puts billions of pounds of public assets partially into private hands.

The scheme has been extremely divisive in the local party, leading to the deselection of several Labour councillors who supported the project. Two local MPs, David Lammy and Catherine West, have also expressed concerns about the scheme.

Labour sources said the move was supported by all of the national executive committee and Andrew Gwynne, the shadow communities and local government secretary, would be asked to mediate in talks with Kober.

One said: “HDV is deeply unpopular in Haringey. Following a request from local councillors for the NEC to intervene, the NEC has agreed to advise Haringey council to pause the plans if mediation processes do not bring about a resolution.”

It is unlikely that Labour could stop its own elected councillors carrying out the scheme but it could take the drastic measure of removing the party whip if a compromise is not reached.

The NEC acted after 22 Labour councillors in the borough wrote to the party urging it to intervene, saying the HDV would be difficult and expensive to get out of once the contract was signed.

It pointed out that of the the 28 sitting councillors who support the HDV, only six had been selected to stand as candidates in the May 2018 local elections. Of all selected Labour candidates, including sitting councillors, 12 support the HDV and 45 oppose it.