A habitat for a watch of nightingales could be created in Essex to allow 5,000 homes to be built in Medway.

The government wants to allow developers to be able to build homes on wildlife habitats if they create a replacement habitat somewhere else.

The policy could pave the way for the development of the former Army base at Lodge Hill, in Chattenden, which seemed doomed when it was given special protection status due to the birds.

The decision had threatened to wreck Medway Council’s blueprint for new housing, sparking concerns that it could revive a plan to build homes on the Capstone Valley, known as Medway Magna.

A committee of MPs this week urged the government to delay the wildlife replacement scheme, known as ‘offsetting’, until pilot projects had been independently assessed, amid fears it could diminish important habitats.

But environment secretary Owen Paterson told the committee that too many developments were being held up by legal disputes over threatened species.

Lodge Hill was put forward as an example.

The proposed £1 billion scheme, which would include 5,000 homes, shops, offices, schools, a doctors’ surgery, two hotels, retirement homes and a garden centre, has been delayed because it is home to 84 nightingales.

Mr Paterson’s department has suggested the dispute over the site could be resolved by the developer funding a new habitat elsewhere.

He said: “What we are trying to get away from is the rather sterile, lengthy and very costly legal battles.”

But Joan Walley MP, chair of the Environmental Audit Committee, said: “Ministers must take great care to get offsetting right or they risk giving developers carte blanche to concrete over important habitats.

"Many witnesses to the inquiry were concerned that the government’s proposal would allow offsetting to be applied to ancient woodland and Sites of Special Scientific Interest.

“There is a danger that an overly simplistic ... system would not protect these long-established ecosystems.”

MPs also expressed concern that new habitats would be created a long way from the site being developed, meaning local people would suffer loss in their access to nature.

Cllr Rodney Chambers, leader of Medway Council, said: “If the site owners come forward with another site that is acceptable to Natural England and also to those that are pushing Natural England in creating a Site of Special Scientific Interest then that is well and good.

“I believe there is another military site that could be offered. I’m not sure of the exact location but I believe it is in Essex.”

A decision on whether to uphold Lodge Hill’s status as a Site of Special Scientific Interest is due in December.