The CPRE says UDCs were meant to address urban blight
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Countryside campaigners are challenging Deputy Prime Minister John Prescott's plan to build homes in west Northants.
The Government wants to set up an Urban Development Corporation, or UDC, to promote growth, but the Campaign to Protect Rural England (CPRE) objects.
The group says the UDC, set up in the Thatcher era, was meant to regenerate rundown metropolitan areas, not towns such as Towcester and Daventry.
A Lords select committee will hear the CPRE's arguments against the move.
It is expected that Lord Rooker, Minister in the Office of the Deputy Prime Minister, will also give evidence on Monday.
'Unelected body'
The CPRE is concerned that the move makes a mockery of the public consultation process, before it even begins.
Julie Stainton, the group's national planning campaigner, said the group is against the prospect of an unelected body being used to drive growth before Mr Prescott makes final decisions on the scheme.
She said: "These growth proposals - part of the Milton Keynes and South Midlands draft sub-regional strategy are still awaiting the final stage of public consultation.
Thousands of new homes are to be built across the region
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A final decision cannot be made before the end of this year."
Ms Stainton said the government "risks rushing ahead again in pursuit of growth regardless of the environmental consequences."
"CPRE is concerned that the growth proposals in the Communities Plan will be environmentally damaging.
"(They) could consume large sums of money - which could have been better spent on direct solutions to meet affordable housing need," she added.
The House of Lords must give permission to set up a UDC.
This cannot now be sought until its select committee has reached recommendations on the order.