Consultation suggests giving more time to councils with no options left, but is withdrawn
The ODPM has performed a dramatic U-turn over the future of its 2010 decent homes target.

A draft version of a consultation paper on the standard proposed relaxing the 2010 deadline for councils whose tenants had rejected stock transfer, arm's-length management and the private finance initiative.

However, late on Wednesday afternoon, the ODPM withdrew the paragraph, claiming it had included it in error and against ministers' wishes. The paper was published as part of the run-up to next month's comprehensive spending review.

An ODPM spokeswoman said: "In circulating the draft technical note for informal consultation with some stakeholders, an early version was circulated, not one approved by ministers. The correct draft is being recirculated."

She denied the note had been revised in response to the outcry it had prompted from the social housing sector.

The draft version would have permitted councils such as Camden – whose tenants have rejected an ALMO and the PFI – to miss the deadline, providing they improved their stock as soon as possible.

It would also have quashed any hopes of them receiving extra government funding. The U-turn leaves the issue of the "fourth way" unresolved, opening the way for councils whose tenants have rejected the three available options to lobby for an alternative.

MPs are expected to use the consultation as an opportunity to press for funding for councils that have run out of options. Launching an early-day motion on the issue earlier on Wednesday, Austin Mitchell MP, chair of the Commons council housing group, said government policy "tells tenants to rot in decaying housing as a punishment for not choosing the option the ODPM wants".

He added: "This is undemocratic, unjust and unfair. We're asking that the spending review should seize the opportunity to save money by junking this failing policy and … empowering councils and providing for the fourth option."

The consultation also adds an emphasis on getting families with children into decent homes.

The paper admits that the ODPM will not hit its milestone for improving 50% of social housing by 2006.