Britain's flagship urban renewal scheme will fail unless it wins the support of local communities, admits the Minister responsible, Lord Rooker.
Some say councils are favouring demolition instead of renovation
Nine Housing Market Renewal Pathfinder initiatives were launched last year, to renew or replace hundreds of thousands of homes in rundown areas of Northern England and the Midlands.
The government is providing £5-6bn over the next 15 years, with the private sector bringing the total to an estimated £20bn.
But plans to demolish the first of up to 400,000 homes between now and 2020 have been met with widespread protests by residents.
Speaking to File On 4, Lord Rooker, Regional Development and Regeneration Minister, said: "Good, genuine consultation that actually changes people's plans is absolutely vital to the success of these programmes.
"If that hasn't happened, there's a failing and we have to learn the lesson."
"There is nothing more sensitive than people's lives and homes."
One of the founders of the Pathfinders project, Professor Brendan Niven, said he feared the social upheaval of earlier mass slum clearances in the 60s and 70s.
"I think the greatest threat to this programme is dealing with the human costs of regeneration and renewal.
"This is our last chance to get it right."
The programme heard from residents in Merseyside and Lancashire who felt they had not been properly consulted about proposals to pull down their streets and rehouse them.
Reverend Philip Chew of Burnleywood, near Burnley, Lancashire, where bulldozing is about to begin of once sought-after stone terraces, described some of his parishoners as "the dispossessed."
All nine Pathfinder regeneration projects have stressed that demolition is a last resort and that their preference is restoration and refurbishment. But in the first year of the programme councils have used compulsory purchase and clearance measures.
Some residents have challenged the findings of surveys which have declared their houses unfit for habitation.
Others have accused councils of being too eager to demolish houses to create sites large enough to attract developers.
The managing director of Liverpool's New Heartlands project, Pauline Davies, said: "This isn't a housing renewal programme, it is a market renewal programme.
"We shouldn't be afraid to intervene in the market to enable people to have a better quality, better designed, better choice of housing."
File On 4: BBC Radio 4, Tuesday 8 March, 2005 at 2000 GMT, and repeated on Sunday 13 March, 2005 at 1700 GMT.