The focus will be on derelict and brownfield sites following a joint bid submitted by Cheshire County, Chester City, Ellesmere Port and Neston Borough and Vale Royal Borough councils.

The Government invited bids for New Growth Point Status from all authorities in England as part of its objective to increase the number of houses in the country by 2016, especially in areas of fast economic growth, such as the West Cheshire sub-region.

The bid highlighted the potential for new housing in the West Cheshire area and the abundance of available brownfield sites in sustainable locations.

The new housing will be linked to existing and new employment sites with improved transport provision, and will lead to an increase in the number of new homes provided over the next nine years, with rates of up to 40 per cent of affordable housing.

Chester is considered the heart of the sub-region, with a concentration of highly skilled workers and a cluster of financial and business services making it an important growth area significantly contributing to the economy of the North West. The council believes it is important for new homes to be provided to help continue this economic success.

Decisions on the future of potential development sites will be made in close consultation with local people and taken through the planning process.

Proposals will also look at ways in which the energy efficiency of new homes could be improved and how more sustainable ways of travelling, such as walking, cycling and public transport, can be promoted.

The decision has been welcomed by Chester MP Christine Russell, who has long made the need for more affordable family housing her number one constituency priority, and Cllr Stuart Parker, city council executive member for development, said: "This is fantastic news for Chester and West Cheshire, and further endorses the importance which the Government apportions to our region.

"The Growth Point Bid proves what partnership working can achieve, and will result in much needed affordable housing throughout West Cheshire."

Cllr Justin Madders, leader of Ellesmere Port and Neston Borough Council, said: "We have many attractive sites and developers have shown that they wish to invest in this area.

"I believe the success of this bid shows that the Government also sees this as an area of great potential and Ellesmere Port in particular can be a focus for new housing growth in West Cheshire."

Mike Jones, leader of Cheshire West and Chester Shadow Authority, said: "I am delighted it has been successful and the new authority will ensure that maximum benefit comes to our communities where affordable housing is an essential aspect of developing our economies and jobs."