The deputy prime minister, who was visiting the New Heartlands scheme in Liverpool, said that the projects would trigger an urban renaissance in many of England's poorest areas.
He also took the opportunity to announce the shortlist for a competition for a practice to draw up a scheme for new homes in the area.
Danish firm 3XN - which is designing the Fourth Grace - BDP, local office Union North with Edinburgh-based Gross Max, Architype, from Gloucester, Alsop off-shoot Studio Egret West and Feilden Clegg Bradley have all made it to the last stage.
The £86 million scheme will see the demolition of a swathe of buildings, many of which locals claim are fine as they are, and their replacement with modern alternatives.
But Prescott attempted to dismiss local objectors, insisting that Pathfinder projects were essential for triggering regeneration and forcing up house prices in deprived areas.
'The Pathfinder programme has started to make a real difference to people's quality of life here in Merseyside,' he said. 'We are beginning to see neighbourhoods which were in decline being transformed into places where people want to live, not leave.
'New high-quality homes are being welcomed by local people who rightly no longer want to put up with poor and crumbling housing, not fit for 21st-century living.
'Importantly, Pathfinder is keeping communities together while providing new modern homes,' the deputy prime minister added.