Residents and environmentalists fear plans to relax planning restrictions could swamp the countryside with thousands of new homes.

The Government is expected to pave the way for major development in the South-East.

A swathe of new homes in East and West Sussex could be made a priority.

The programme could double the number of houses built in the region.

The plans are to be announced next month as part of the comprehensive spending review.

It is hoped the move will help combat rising house prices and prevent key workers moving away.

However, residents, councillors and environmental groups claim Sussex is overcrowded. Many fear the quality of life which attracts so many would be ruined.

Campaigners say there is little land outside the green belt and not enough brownfield sites to accommodate high-density housing.

Ian Davey, co-ordinator for Brighton, Hove and East Sussex Friends of the Earth, said: "The South-East is over-congested. Lifting planning regulations will only lead to more desecration of the countryside and increase the pressure on the over-strained transport system."

Shelagh Arlow, of the action group Hurstpierpoint Against Housing, said: "We can't take any more houses here. It would ruin the village environment."

Tom Jones, chairman of Ditchling Parish Council, said: "We would be aghast at any plans to build houses in rural areas other than on brownfield sites.

"We do not want to urbanise our parishes.

Mary McPherson, Ringmer councillor on East Sussex County Council, said more houses would change the character of villages. She said: "We accept we have got to take some of our share of the housing, particularly as we have a tremendous need for affordable housing. It is a difficult balancing act."

Only 22,957 homes earmarked for the South-East have been built out of the 28,050 agreed with county authorities.

The Government is worried the lack of affordable housing will hold back growth in the South-East and therefore nationally.

Ken Bodfish, leader of Brighton and Hove City Council, and deputy chairman of the South-East England Development Agency (Seeda), welcomed the plans.

He said: "There is a desperate situation for affordable homes. We must provide housing for people working in the area."

"No one is suggesting building on areas of outstanding beauty but there is plenty of capacity for providing housing."

Keith Taylor, Green Party convenor on the city council, said: "The decision is welcomed by us but it is far too little too late.

"Government should stop council house sell-offs and transfers to housing associations. We must bring empty property back into use."