By Ollie Stone-Lee BBC News Online political staff in Blackpool

The right for council tenants to buy their homes could be halted in some areas of London and south-east England, Deputy Prime Minister John Prescott has signalled.

Homelessness charities have already called for Margaret Thatcher's flagship policy to be suspended in those areas because it was making chronic shortages worse.

The Right to Buy undermined - and continues to undermine - social housing in designated housing crisis areas John Prescott

Mr Prescott said he did not want to end the Right to Buy but highlighted the way the Tory governments had exempted some rural areas.

He also used his Labour conference speech in Blackpool to "serve notice" to landlords exploiting the housing system.

Shortages

Mr Prescott also announced the creation of a new housing inspectorate arm of the Audit Commission to help the drive for "decent standards".

He told delegates how the "desperate shortage of affordable housing" in south-east England was forcing nurses and teachers to change jobs because they could not live near where they worked.

"In these areas of housing shortage, the Right to Buy is denying families the right to a home," said Mr Prescott.

"Now, I am not saying we will end the Right to Buy. No one is seeking to turn the clock back 20 years.

"But the Right to Buy undermined - and continues to undermine - social housing in designated housing crisis areas.

"When the Tories saw the Right to Buy causing similar problems in some rural areas, they made exemptions.

"So, in those areas, where exploitation and abuse of the system exist, when people suffer as a result, when our public services are undermined, and where the Right to Buy undermines the right to live in decent conditions, it would be irresponsible not to act."

Tackling landlords

Mr Prescott said the north of England by contrast faced the problem of collapsing demand, with streets of houses knocked down because nobody wanted to live there.

"And in those most vulnerable areas, unscrupulous landlords - the new Rachmans - are starting to appear," he continued.

"They run down the houses, they exploit loopholes in the housing benefit system to turn a profit, they rip off tenants and they rip off the public.

"What's worse is that they create a breeding ground for the likes of the racist BNP.

"To those landlords I hereby serve notice: we are going to bring your days of exploitation to an end."

Mr Prescott said he planned to announce a "step change" in housing to Parliament in the New Year.