The study from Policy Exchange also recommends that all building on brown field or previously developed sites should be allowed unless more than 50 per cent of people living nearby object.
It also calls for new garden cities, paid for by developers and construction companies, to be built on the verges of existing towns to boost Britain’s economy.
The 112-page report, published today, has been sent to key aides close to the Prime Minister, including Andrew Cooper, his personal pollster.
It comes at a delicate time for Mr Cameron who is under fire by heritage and environmental groups by trying to change existing planning rules so that they allow more economic development.
The Daily Telegraph has also launched a campaign called Hands Off Our Land, urging ministers to rethink the draft National Planning Policy Framework, which distils 1,300 page of planning guidance into just 52.
The Policy Exchange report criticises the current planning system as “dysfunctional”, and blames existing restrictive planning rules that have resulted in soaring house prices and rents, pricing out people who want to buy new homes
The report says there is a “mistaken belief” that the protected green belt around towns and cities – which accounts for 12 per cent of all the land in England - is “necessarily more attractive”.
The report, titled ‘Cities for Growth’, says that 70 per cent of people would be happy to see building on green belt land.
It says: “It is little consolation to a child growing up in a dense, grey, inner city that miles away on the urban fringe there is little more intensive farmland than there otherwise might be.”
It recommends that “building on the green belt should be permitted if the majority of local people are in favour”. It suggests a levy on all green belt development to pay for improvements to help people enjoy the space when it has been built on.
The report adds: “People believe that the green belt is national parks and forest, yet the majority of green belt does not consist of meadows or nature reserves but intensively farmed land around cities.”
Ironically, it says, by protecting green belt land, more inner-city parks are concreted over in the cities, worsening the quality of life of people who live there.
The report calls for the Government to “enable the creation of new urban areas: private sector garden cities”, paid for by developers and other companies.
It says that these new garden cities should be funded by cash reserves that are being “hoarded by companies”.
These new garden cities would be created on the edge of towns, to provide a major boost to productivity, it says.
They could create a new “brain belt” similar to Silicon Valley in California, linking successful cities like Leeds, Cambridge and London.
The report notes that two million people – one in every 30 Britons – now live in new towns built between 1945 and 1975, adding that one of them – Milton Keynes – saw the second fastest private sector job creation between 1998 and 2008.
Alex Morton, author of the report, said: “Our planning system has delivered both too little and too poor quality development, and led to an adversarial relationship between developers and local communities.
“It has squeezed out good quality building, by making land so expensive that people have little left over to build attractive developments.
“New and attractive Garden Cities and planning reform can solve our housing crisis and drive economic growth.”
A Downing Street spokesman said last night: “We have no plans to change the existing policy on the green belt.”
