The Office of the Deputy Prime Minister is arguing that it should take over the urban renaissance programme from the DTI.
The main objective of the ODPM is to gain control of the regional development agencies, one of the key elements in the regeneration programme.

Deputy prime minister John Prescott had responsibility for the RDAs when he ran the DETR between 1997 and 2001, but they were transferred at the last reshuffle in May.

A Whitehall source said: "Prescott is trying to wrest control of RDAs from the DTI. It makes sense, as he runs local government offices and the regional government agenda."

Industry observers gave the thumbs-up to the idea. Ken Dytor, chief executive of regeneration developer Urban Catalyst, said: "Prescott set up the whole structure of RDAs. He's the natural lead for RDAs in government."

Prescott is the natural lead for RDAs in government

Ken Dytor, Urban Catalyst

Others questioned whether Prescott would succeed in having the agencies transferred. One industry observer said: "It would have made more sense at the time of the reshuffle."

Other steps taken by Prescott include scheduling a meeting with urban taskforce chairman Richard Rogers later this month. Rogers has recently been critical of the government's regeneration record and will next week address the issue at an Observer/Guardian conference on the subject.

A taskforce source said: "Rogers will identify areas of action for regeneration for the government to deal with over the summer." These include higher housebuilding targets on brownfield land.