Former Conservative cabinet minister John Redwood will argue this week that for giant eco-city to be built on reclaimed land along the Thames estuary between London’s Docklands and the Medway towns to alleviate overcrowding in the capital and boost the capital's economic competitiveness.

Redwood wants to see more than a quarter of a million homes built, clustered together as a brand new city, with an extra 3m square metres of commercial space.

The proposal will be part of a Tory policy report into reforming Britain's economy, commissioned by shadow chancellor George Osborne and chaired by Redwood, together with Next boss Simon Wolfson. Their findings will be published later this week.