Leaders of the National Housing Federation warned that a double whammy of radical planning system changes and funding cuts could see the number of social homes slide to the lowest level since 1990.

They predict that social house building starts might slump by 65% to only 20,390 social homes this year.

But the minister has dismissed the industry's fears as he continues with a radical revamp of the sector.  

Shapps warned last week that around 150 social housing projects were under threat because of a £610m ‘black hole' in the Government's finances.

It has already announced that £100m will be cut from the National Affordable Housing Programme (NAHP), which was meant to deliver 59,000 new social homes this year 2010/11.

The withdrawal of this funding will see plans to build another 1,453 social homes axed.

But the sector could also face a double blow as changes in the planning system could prevent tens of thousands affordable homes being built.

The government is thought to be considering scrapping ‘section 106' agreements, which could lead to around 19,000 social homes being axed this year.

And the Government's re-designation of gardens from brownfield sites to greenfield - in a bid to end so called garden grabbing - could see a further 10,000 new homes hit.

Federation chief executive David Orr said: ‘The brutal impact of funding cuts combined with the introduction of ill conceived changes to the planning system could lead to a 65% slump in the number of new affordable homes built this year.