The expansion plans were approved at a meeting of the eastern regional assembly and will mean building at least two new towns in Hertfordshire - one the size of St Albans and another comparable to Stevenage - by 2021. Harlow, in Essex, will have to expand dramatically.

Derrick Ashley, a Hertfordshire county councillor, accused the Government of turning the South-East into a Hong Kong-style industrial and commercial power house.

Powers for strategic planning had been taken away from the county councils and given to a regional body which was pushing them through on behalf of the Government, he claimed.

He said: "This may be good for economic growth but it is not in the best social and environmental interests of the country as a whole. What is needed in the South-East is social housing but this kind of numbers game does not address this issue at all.

"What concerns us, apart from losing our greenfields, is that the roads, rail links, hospitals and schools are already overstretched yet there are no plans for the Government to address these issues. How are the extra people going to get about on the M25, M11, M1 and on the railway lines that are already overcrowded?"

Hertfordshire and Essex submitted a joint proposal to reduce the number of new homes to 442,000 but it was rejected. In a statement Hertfordshire council said a shadow had fallen over the county.

There will be a period of consultation over the decision prior to a public inquiry in the summer of 2005. The Government is then expected to approve the plan during 2006.