David Cameron and Nick Clegg have announced a package of measures designed to boost the housing industry and growth through an injection of cash, looser planning laws and the lifting of requirements for developers to build affordable homes.

Downing Street claimed the measures, arguably the coalition's fourth attempt to boost house-building, would create up to 70,000 new homes, including affordable housing, opportunities for first-time buyers to get on the housing ladder, 140 000 jobs and a boost to the construction sector.

The package includes a £40bn guarantee for major infrastructure projects and £10bn guarantees for new homes.

In a bid to unblock the barriers to house-building at a time of pent-up demand, the package includes a promise to allow developers to renegotiate agreements with local councils so they need not build as many affordable homes for a temporary period. The Treasury will provide an extra £300m cash from under-spending in other departments, designed to boost affordable housing directly, and so make up any shortfall.

Developers claim over-onerous agreements imposed by councils prevent them going ahead with projects even when they have planning permission. Developers that have not pressed ahead with a project despite five years of permission will be able to appeal to the planning inspectorate to lift the conditions.

Cameron told Daybreak the move was about confidence.

"Frankly we had a situation where the lenders did not want to lend so the builders could not build and the buyers could not buy," he said. "We are talking today about 140,000 jobs provided by building an extra 70,000 houses."

Clegg said the government was telling private house builders: "If you are finding it too expensive to raise money yourself to put shovels in the ground to employ on construction sites and build homes for private rent and to build affordable homes we are going to make it cheaper for you to do so".

Clegg claimed the measures could unlock 75,000 homes that are currently stalled, as well as seeing the construction of 15,000 new affordable homes, and bring further empty homes back into use.

Ministers are publishing legislation for government guarantees of up to £40bn of major infrastructure projects and up to £10bn of new homes. The infrastructure (financial assistance) bill will include guaranteeing the debt of housing associations and private sector developers.

The government warned it would put councils into "special measures" if they failed to respond speedily to planning permission requests. More applications will be put into a fast-track process.

The size of domestic and business home extensions will be extended before full planning permission is required.

In a bid to assist with mortgages, the government will help 16,500 first-time buyers with a £280m extension of the "FirstBuy" scheme, which offers aspiring homeowners a much-needed deposit and a first step on the housing ladder.

Cameron said : "The measures announced today show this government is serious about rolling its sleeves up and doing all it can to kickstart the economy. Some of the proposals are controversial; others have been a long time in coming. But along with our housing strategy, they provide a comprehensive plan to unleash one of the biggest home building programmes this country has seen in a generation. That means more investment around the country; more jobs for our people; and more young families able to realise their dreams and get on the housing ladder."

Rachel Reeves, the shadow chief secretary to the Treasury, said the measures were not adequate to the task.

"We need to get Britain building again, but the government has slashed the housing budget and the number of affordable homes being built is down by 68%.

"The fundamental problem is not the planning system or Section 106 agreements for much-needed affordable housing, it is the lack of confidence and demand in the economy, slashed public investment and the government's failing economic plan.

"If ministers really want to help homeowners and small firms, why don't they listen to our idea to cut VAT to 5% on home improvements, repairs and maintenance?"