Mr Prescott is reported to want to encourage development which draws on the ideas of 19th century mill pioneers such as Robert Owen, who created revolutionary working and living conditions for his employees at New Lanark near Glasgow.
He believes that 'cluster' development - mixing business with homes - can relieve pressure on roads and transport and improve the lives of local people by creating self-sustaining communities.
The scheme paves the way for similar greenfield developments in places like Cambridge and Northampton. But Mr Prescott tied the Newcastle development - about five miles outside the city - to the redevelopment of the city centre.
In a speech in Gateshead today, Mr Prescott is expected to argue that sustainable communities - which combine modern industry with decent housing and good transport links - need to be encouraged.
He will also say that the north can stand its ground with the south in attracting new investment, development and jobs.