Sajid Javid has ordered local authorities to provide “honest” figures on the number of homes needed in an area as he accused some councils of providing “fudged numbers”.

The comments from the Communities Secretary come as the Government prepares to publish its long-awaited housing white paper aimed at fixing Britain’s “broken housing market”.

The white paper will order local authorities to build thousands more home and claim that 40 per cent of local planning authorities “do not have an up to date plan that meets the projected growth in households in their area”.

Local authorities will also be instructed to use city centre sites and prioritise high-rise blocks in order to meet demand under the plans.

Under the last Labour government housing requirements were calculated nationally and then distributed to local councils, who had to set a plan to meet demand. The Government now plans to return to a nationally standardised way of calculating housing demand in an area, and again require councils to draw up plans.

But speaking on BBC’s Radio 4 Today programme, Mr Javid, who described the plans as “bold” and “radical”, added: “We need to make more land available in the right places… the primary method we’re going to require all local councils to come up with a realistic assessment of their local housing need, it has to be an honest number that is based on real demand in that area.”

“We’ve had a situation so far where some local authorities have done just that and others have frankly have fudged the numbers and not been real about the need and that’s going to change.

He continued: “The fact is we haven’t been building enough homes for decades under successive governments. The current system is not working – I think it’s the greatest barrier to social progress we have today.

He said the country needed at least 250,000 more homes in Britain as a result of a “big deficit”.

The white paper will also set out that only in “exceptional circumstances” will local authorities be permitted to build homes on the green belt. In order to do so councils will have had to look at every alternative first.

On Sunday Gavin Barwell, the housing minister, acknowledged the Government’s proposals would represent a “change in tone” from previous Conservative policy and Margaret Thatcher’s “home-owning democracy” advanced by David Cameron.

Labour’s shadow housing minister John Healey said the plans briefed out were “feeble beyond belief”.

He added: “After seven years of failure and 1000 housing announcements, the housing crisis is getting worse not better.

“There are 200,000 fewer home-owners, homelessness has doubled, and affordable house-building has slumped to a 24-year low.”

He said the policies were “a white flag not a white paper”.

Publishing the white paper on Tuesday, Mr Javid is expected to say: “Walk down your local high street today and there’s one sight you’re almost certain to see. Young people, faces pressed against the estate agent’s window, trying and failing to find a home they can afford.

With prices continuing to sky-rocket, if we don’t act now, a whole generation could be left behind. We need to do better, and that means tackling the failures at every point in the system. The housing market in this country is broken and the solution means building many more houses in the places that people want to live.