Norfolk councils are planning to borrow £20m to kickstart housebuilding in the county which has been stalled for more than a year by concerns over the impact on the local environment.
The authorities are trying to reinvigorate scores of housing schemes, which have blocked by so-called 'nutrient neutrality' rules.
These require the impact of the properties' pollution - through substances in their waste water which can end up in local rivers - to be offset.
The councils believe they have found a way to do this, but need money to help to get the offsetting system up and running.
Their plan to borrow millions comes at a time of rising interest rates, but the authorities believe they can secure the loans at lower-than-normal cost.
The money would then be lent to a newly formed company, which has been set up specifically to address the nutrient issue.
In March last year, councils across much of Norfolk were told by government advisors Natural England they could not permit planning applications for homes within catchment areas of the River Wensum and the Broads.
That was because of concerns extra nutrients created by homes could go into waterways and harm species.
READ MORE: How two words left Norfolk's plans for thousands of homes in limbo
To deal with it, council bosses have launched a joint venture company with Anglian Water, called Norfolk Environmental Credits Ltd, allowing housebuilders to 'offset' the impact of their developments by buying 'credits' to fund mitigation measures.
Senior planning officer Phil Courtier recently confirmed the authorities also applied for up to £12m from the government's Local Nutrient Mitigation Fund to help pay for improvements to wastewater treatment works, provision of septic tanks and natural schemes.
However, at this month's meeting of Greater Norwich Growth Board - made up of Norfolk, Norwich, South Norfolk and Broadland councils - officers will say even if the government awards that cash, it will not be enough.
Graham Nelson, executive director of development and city services at Norwich City Council, said: "To mitigate the total number of homes currently backlogged, plus the future homes allocated in the Greater Norwich Local Plan, which will be impacted by nutrient neutrality, will cost tens of millions."
He is recommending the board agrees to speed up the development of a loan fund allowed by the government, through which councils can borrow at low rates, through which the new joint venture could potentially borrow up to £20m.
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