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Insurers have warned that they won't provide affordable insurance for the homes planned in the Thames Gateway unless the risk of flood damage is reduced.

The Association of British Insurers said effective flood protection had to be developed for large-scale regeneration schemes such as the construction of at least 60,000 homes in the Thames Gateway growth area.

Otherwise, affordable insurance cover "would not remain readily available", the ABI said in a submission to the environment audit committee on sustainable housing. The committee was set up in 1997 to examine the environmental implications of housing policy.

The association singled out the Thames Gateway, which is to the east of London, as particularly vulnerable to catastrophic floods.

A sustainable approach to flood protection must be incorporated into all stages of the development process from masterplanning to individual sites, it said.

Climate-proofing new homes in southern England against subsidence would cost a total of £32m, compared to an annual cost of up to £400m from damage claims, according to a study carried out in 2000 by research consultant BRE.

The ABI is urging the government to create a checklist to be used by planning authorities and made available for public scrutiny.

Sebastian Catovsky, the ABI's policy adviser, said the risks associated with building in the South-east should be addressed as a priority.

A spokeswoman for the ODPM said it was already taking action to ensure that effective flood defences are put in place as part of the Thames Gateway development proposal.

She said: "Where we are funding projects in the Gateway it will be conditional on an appropriate flood risk assessment being carried out with the Environment Agency."

In a further blow to the government's housing plans, a study commissioned by the Department for Environment, Food and Rural Affairs has said the building programme proposed by the Barker Report would have devastating environmental consequences.

The research, published last month, said Barker's proposal to build 1.4 million homes over the next 10 years would swallow 78,000 ha of green belt, equivalent in size to half of Greater London, and increase carbon dioxide emission by 20% by 2016.