Council tenants face losing their right to a 'home for life'

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People would instead be allocated social housing on a fixed-term contract with regular reviews every few years.

They could also be required to work or seek a job in order to benefit from a council home.

The shake-up of the rules would aim to use social housing as a stepping stone for many people to find a property in the private sector, buy a share in their current property under a part-ownership scheme or pay higher rent.

The system at present is unpopular as council tenants can enjoy their subsidised accommodation for life and many are able to pass flats or houses on to their children.

In some cases, people initially granted social housing because of financial hardship are able to retain the subsidised homes after becoming wealthy.

The reforms would also aim to deal with the huge waiting list, of 1.6 million households or four million people, for social housing. The backlog has built up as only 170,000 homes with subsidised rents become available each year.

Whitehall officials are examining the proposals to end life tenancies put forward by the Chartered Institute of Housing, which represents housing officials, according to The Times. The idea is understood to have gained favour under former Housing Minister Caroline Flint. But her successor Margaret Beckett has ordered further analysis of proposed new policies and has delayed the publication of the Government's Green Paper on social housing, which had been expected this month.

A spokesman for the Department for Communities and Local Government said: "We recognise that housing professionals like the CIH have made a case for reform in the social housing sector.

"As new Housing Minister, Margaret Beckett is currently considering all the evidence and arguments in favour of changes to the current system.

"However, she has not taken any decisions on measures that may form part of a reform package. We expect to signal how we intend to take this forward in the new year."