Rishi Sunak could be forced to compromise with rebel MPs over the scrapping of housing targets to avoid relying on Labour votes to pass the levelling up bill.
It comes as the former cabinet minister Simon Clarke attempted to amend the same bill to allow new onshore windfarms, on which he hopes to attract Conservative and Labour support. Onshore wind was to be relaxed under Liz Truss but Sunak’s government has kept the ban.
The prime minister was forced to pull the second day of the levelling up bill after the sizeable rebellion by Tory MPs on planning. That amendment, led by the former cabinet minister Theresa Villiers, has backing from 46 MPs who want to scrap mandatory local housing targets and make them advisory only.
The government pulled a vote on the bill scheduled for Monday to allow more time to engage with MPs.
Labour has said it would not back the move but multiple MPs said Sunak had been left paralysed by the scale of the rebellion. “He cannot push this through because he would lose and have to rely on Labour votes,” one said.
“That means he shows within his first few weeks that he effectively doesn’t have a majority in the party – that’s very dangerous for a prime minister who came to power in the way he did.”
Another MP said the rebels had Sunak “by the balls” and would not be bought off – and said they were expecting significant concessions from the government.
A Department for Levelling Up, Housing and Communities source said there were efforts under way to find a compromise. “Engagement is obviously the important thing. [Delaying the vote] gives us more time to engage.”
The former cabinet minister Maria Miller, who has signed the amendment, said it was good ministers were thinking again and said the amendment would allow communities such as her Basingstoke constituency to “slow down housebuilding to what we need in our community rather than building for needs of the region”.
But the apparent willingness to compromise has also angered other parts of the party. Clarke, who was levelling up secretary under Liz Truss, said the party’s vote would collapse if it did not help people on to the housing ladder.
“If you want to see what the future of the Conservatives is when we don’t build homes, look at London,” he said. “Our collapsing vote in the capital is at least in part because you can’t make the case for popular Conservatism if you can’t afford to buy, or even rent.
“The flip side, why can we win in areas like Teesside? It’s at least in part because if you are a nurse or a teacher, you can still afford a proper family home. This isn’t rocket science – it’s economics and politics 101.”
Asked about the planning rebels during an appearance before the Commons Treasury committee, Jeremy Hunt said that while any decision would be up to Michael Gove, the levelling up secretary, he was very aware of the difficulties over housing faced by young people.
“I think that we need to ask ourselves why it is that the way our planning rules work often sets local communities against the national need to build more houses, and how we can improve that,” the chancellor said.
Clarke’s amendment, tabled on Wednesday, would revise the National Planning Policy Framework to permit the development of new onshore windfarms. Labour sources said they were examining the wording but suggested they were optimistic the party could support the move.
“Allowing onshore wind development to proceed where local communities want it would be the right thing to do economically, environmentally and in terms of our energy security,” one source said.
“Onshore wind is the cheapest form of energy generation and is popular with the public – including a clear majority of 2019 Conservative voters. We should put the decision back in the hands of local people, rather than applying what is effectively a blanket ban made in Whitehall.”
Labour has said it would double the amount of onshore wind, one of the cheapest and quickest sources of renewable energy, and quadruple offshore wind by 2030.
