He will almost double the£1bn budget for the Housing Corporation. The extra funds for the body that disburses money to housing associations are designed to kickstart a housing programme for key workers such as police, teachers and nurses to buy or rent properties.
Ministers insist they will avoid concreting over the green belt. The expansion will be focused on four existing areas with good communications links with London: Milton Keynes; Ashford in Kent; Stansted in Essex; and the Thames Gateway, expanding London to the east.
Mr Brown and deputy prime minister John Prescott are this week putting the finishing touches to the plan. They have rejected an alternative strategy, pressed by trade unions, of increasing the amount of free loans - at present fixed at£10,000 - available to key workers to help them buy homes. The chancellor has decided this would merely fuel soaring prices.
The deputy prime minister will follow the chancellor's statement by announcing measures to streamline the planning system, which ministers claim has hindered housebuilding, before parliament rises for the summer recess. Ministers are negotiating a deal with builders to offer quicker planning approvals in return for more housing, providing that a high proportion of the new homes are 'affordable'. Mr Prescott is also seeking more money for councils so that they can recruit more officers to speed up the planning process, which has been starved of funds.
He is determined to concentrate not just on building new houses, but also on creating communities properly served with infrastructure and good transport links. He wants more roads, schools and other vital amenities to be provided for new developments; builders have blamed their absebce for holding up construction.
He is confident he can square the circle of providing affordable housing and preserving the countryside by building at higher densities than in the past on land that has already been used. In May, years ahead of schedule, the government exceeded its goal of building 60% of new houses on brownfield, and is now considering setting a higher target.
The Observer (Business, p1) says the government is to create new bodies called 'special purpose vehicles' (SPVs) to construct tens of thousands of homes in the government's housing 'opportunity zones', steamrollering opposition. These bodies - like old-style development corporations - will sidestep regional planning rules, taking charge of schemes which could be worth hundreds of millions of pounds. The government will place the regeneration agency, English Partnerships, at the centre of SPVs to ensure brownfield sites are cleaned up.
Broad agreement has been reached between Gordon Brown and London mayor Ken Livingstone on a transport strategy for London and the Thames Gateway.
However, the mayor will clash with the chancellor today. Mr Livingstone plans to use a speech in front of hundreds of European city mayors gathered in London to demand that moves by central governments to 'nationalise' European Union money earmarked for regional development be stopped.
The Observer Business section carries an eight-page special feature in conjunction with English Partnerships. Entitled 'Save our Cities', the supplement looks at urban regeneration - the successes, the failures, and the whys and where-fores.
The Sunday Times (p2) says that as well the business friendly move to scrap planning controls for businesses in up to 2,000 areas, Gordon Brown is to allocate up to£60m to a scheme that introduces children as young as four to the virtues of enterprise and business. Mr Brown has been impressed by the work of Young Enterprise, a charity that aims to 'inspire and equip young people to learn and succeed through enterprise'.
The chancellor believes that if his plan to create a business-friendly culture in schools is successful, it could lead to an extra 200,000 businesses a year.