A REVIEW of Oxford's Green Belt has been endorsed by the Government, which could clear the way for an urban extension of Oxford.

The Government yesterday finally gave its response to the planning inspectors' report on the South East Plan, which sets out the number of homes that should be built in the region.

The inspectors spelt out a strong preference for Green Belt land, near Grenoble Road, as the best site for a housing development.

And they said "a highly focused" review was justified by Oxford's housing needs, worsening traffic congestion, cost of property and the problems recruiting and retaining staff.

While the Government says a Green Belt review should go ahead, it says that if any land is taken out for development a second review should take place. This should seek to compensate for any loss by finding new areas of land to be added to the Green Belt.

The Government also propose a small increase in the number of new homes proposed by the inspectors for the region.

The inspectors' recommendation of 32,000 new homes a year over 20 years, should go up to 33,150.

The South East Assembly had originally proposed 28,900 homes.

Keith Mitchell, the leader of Oxfordshire county council, who yesterday stood down as chairman of the regional assembly, said: "We can live with an extra 1,150 homes but remain unhappy about the Green Belt, which should be left."

He said it appeared that the review would be carried out by Oxford City and South Oxfordshire District Councils. But there was still no clarity.

Crucially, the figures do not include homes that might be built in eco-town settlements, such as Weston Otmoor, proposed near Weston-on-the-Green.

A Government spokesman said: "There are sever eco-town proposals currently under consideration within the region. All these are still at an early stage and they have not been included in the review of the regional plan.

"Shortlisted eco-towns in the region have only reached the firstt stage and locations have to go through public consultation and detailed sustainability appraisal."