Selby'S council house waiting list will be dramatically reduced after the Government today approved an innovative scheme to build affordable homes.

The £18 million public-private partnership will provide 250 low-cost homes to rent, bringing properties within reach of tenants on low incomes.

It is the country's biggest Private Finance Initiative (PFI) new homes scheme to be supported by the Government, which has contributed £6.7 million.

The project is only the second of its kind in the UK and Selby was said today to be "paving the way" for other local authorities.

Selby Council will be partners in the scheme, with builder Lovell and South Yorkshire Housing Association, which will fund most of the project and manage the new homes.

The council will provide the land, worth £1.25 million, and pay yearly instalments averaging £25,000 a year for the next 30 years - a total of £2 million.

The council's director of community services, Steve Martin, said: "It's the next best thing to building and owning houses ourselves.

"Selby is unusual in that the housing waiting list, which stands at over 1,300, is growing, and new affordable homes will cut the number of people waiting."

The council would still retain some control as it would set the style of housing, the rents - which are expected to average £60 a week - and standards of maintenance.

Mr Martin said the 250 homes would be a 50-50 mix of two- and three-bedroom houses and two-bedroom flats, and a small number of bungalows.

The first homes to be built under the PFI scheme will be 46 on the former bus depot site, in Flaxley Road, Selby, where work will start next March.

Other sites allocated are at Barwic Parade, Selby, Main Street, Riccall, Hambleton and West Haddlesey.

The council's Social Board chairman, Melanie Davis, said the district had a major shortage of affordable property.

She said: "Add to this the demographic trends of a growing population, which will include a large number of retired people, and the housing situation in Selby could have reached crisis point in a few years.

"Thankfully the housing deficit can now be addressed and reversed, and we will be able to provide people with modern homes that meet and exceed the housing standards demanded in the 21st century."

Updated: 15:51 Wednesday, December 11, 2002