The first ones will be in Bristol and Peterborough, and are considered a test for Chancellor Gordon Brown's plans to build five new 'eco-towns', each containing up to 100,000 houses.

A further 21 councils have expressed interest in having the remaining three pilot projects built in their areas. They are likely to feature alternative power sources, such as solar panels and wind turbines, as part of the Government's push to cut emissions of greenhouse gases.

It wants all new build homes to be carbon neutral by 2016.

Bidding for the Bristol site will open tomorrow (Tuesday 5 June) and the Peterborough bids will open shortly, the BBC reported.