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In a long-awaited response to the homeownership taskforce report, the ODPM said associations should be allowed to decide how to spend their surplus shared-ownership receipts.

This is a direct rebuttal of the taskforce's conclusion last November that registered social landlords should be forced to reinvest receipts generated by the sale of shared-ownership homes in similar projects.

The government's written response, published on Thursday, said: "RSLs should be able to use their surpluses in the most efficient way depending on their circumstances but the use of surpluses should be more transparent.

"The ODPM will be working with the Housing Corporation to address this."

Associations, some of which rely on the receipts to support extra borrowing, welcomed the government's stance.

John Schofield, group director at Family Housing Association, said: "The bottom line is that they would have had to tell RSLs how to spend their own money. It was just totally incompatible with the Housing Corporation's plans for lighter-touch regulation."

John Barker, chief executive of Moat Housing Group, said: "We're delighted with the way the ODPM has responded to concerns from housing associations. They seem to have recognised we're independent bodies and should be free to spend our surpluses as we think appropriate."

However, there was disappointment that the government had refused to act on another of the taskforce's central proposals – making council tenants' right to buy more like RSL tenants' right to acquire.

Richard Kemp, acting chair of the Local Government Association's housing executive and a member of the taskforce, said: "The government hasn't even taken a first step towards looking again at right to buy. This policy is taking away people's right to affordable housing and breaking up communities and families."

The government's response also supported the idea of key performance indicators to monitor RSLs' delivery of affordable homeownership.