The plan was given cross-party support at a full meeting of the local authority although the Labour group, through leader councillor Willie Innes, expressed some concerns about a "freeze" on the modernisation programme for existing tenants who would be "picking up the tab."

The council currently has around 8,000 properties, with 50 per cent of its stock having been sold under 'Right to Buy' legislation.

More than 5,000 people are on the housing waiting list while, last year, the stock turnover dropped to around 300 homes.

The funding, which is on top of the £39 million investment already earmarked for affordable housing, will mainly come from increased borrowing.

Approval

The council is also looking into recent changes in the Scottish Government's rules on council tax receipts, specifically in the areas of second homes and empty homes discounts, to increase funding.

It will be seeking ministerial approval for its plans to use this revenue of around £2 million over the five year period towards the cost of borrowing for new council houses.

David Spilsbury, Head of Corporate Finance, said the Housing Revenue Account budget would be revised to include additional investment of £100 million in new affordable housing over the next five years.

He stressed that at this stage no new deals to acquire additional houses had been agreed but the council should be ready to commit to purchase if developers showed an interest.

He explained: "The total investment that can be sustained by rents is limited and in making a budget the council strikes a balance between rent levels, maintaining and investing in existing stock, and investment in new stock.

Investment

"A substantial increase in new housing investment means reconsidering the other two factors."

Mr Spilsbury added: "In developing the revised budget, no change has been made to the rent increases approved on February 17, although given current inflation rates, this is something the council may want to review in future years.

"Similarly, the council has invested heavily in modernisation and you may wish to review the scale of that investment, alongside the size of the maintenance project."

Councillor Stuart Currie, depute council leader, said: "There is an absolute desperate need for affordable and council housing, and again we have received additional funding from the government for that."

He stressed: "There is the opportunity to put in place potential deals over the summer period which would have to come back to council or cabinet as appropriate for approval."

Full report in East Lothian News, June 26, 2009