A £1.3m cash windfall could help provide an urban extension to Oxford, according to city council leader Bob Price.

The “new homes bonus” money is being given to the city council by the Government this year.

Similar amounts of cash will be paid over the next five years.

The payment is aimed at encouraging authorities to create more housing, through both new homes and existing buildings.

Mr Price said: “We’re obviously desperate to develop Barton, but the real aspiration is to develop south of Blackbird Leys We would very much like to use some of the money to unlock that land.”

He said he would aim to work with South Oxfordshire District Council , which is responsible for the land south of Grenoble Road.

But the council’s Conservative leader Ann Ducker said she would not back plans for homes on the Green Belt land.

She said: “As far as the new homes bonus is concerned, it’s up to him to spend as he wishes. But as far as building on the site off Grenoble Road or anywhere in the Green Belt is concerned, I don’t agree with him.”

She added that her council would be using its allocation of new homes bonus money, which totals more than £600,000 this year, to boost facilities in existing areas.

Some of the cash given to the city will be put into its reserves pot, which currently holds about £5m.

Cherwell District Council received £703,195, the Vale of White Horse got £997,645 and West Oxfordshire received £670,011.