Deputy prime minister John Prescott has ordered one of England's largest councils to justify its refusal to follow a government decree to build 5,700 houses a year.
Kent County Council will have to illustrate its reasons for capping annual residential construction at 4,700, which it feels provides an equilibrium between housing demand and supply.
Anything above this figure is not economically sustainable, says the council.
The Tory-led council said the counties of south-east England did not have the economic strength to cater for the rate of development as stipulated by Prescott.
'What we wish to see is an improved rate of economic development parallel with the proposed rate of housing provision, ' said a spokesman. He said housing provision was running ahead of economic development and increases in provision were likely to be met with low occupancy rates.
Prescott's Department of the Environment, Transport and the Regions revealed that Kent had been the only council to oppose the government's regional planning guidelines, which state that 860,000 homes must be built in south-east England by 2021.
The Kent spokesman added that there had been a long-running disagreement between local authorities in the South East and the government on how housing should be distributed.