Britain’s first carbon-neutral village will be built on a former state-owned site being auctioned by the Government.

English Partnerships, the land quango, has drawn up a shortlist of five housebuilders to bid for the site, on the outskirts of Bristol, where the Government wants a new generation of energy-efficient housing built.

The aim is to build 150 super-energy-efficient houses about six years ahead of the Government’s deadline for ensuring that all new housing is carbon-neutral.

Barratt Developments and Taylor Wimpey, Britain’s two largest builders, are vying for the contract, along with MJ Gleeson, a rival quoted builder; Edward Ware, a private firm; and Places For People, a housing association, The Times has learnt.

The scheme will provide a bench-mark for both the Government and the housing industry to calculate how much of the higher costs associated with so-called eco-housing can be passed on to homebuyers.

All new homes built from 2016 must be carbon-neutral, according to new rules issued in March.

However, English Partnerships has declared that it will only sell the land near Bristol to a housebuilder that can produce this new breed of energy-efficient housing.

The Bristol site, dubbed Hanham Hall, could be completed within three years - six years ahead of the official target.

Housing sources said that some of the larger bidders may build the homes as a loss-leader, absorbing the extra costs of installing energy-efficient devices as a marketing tool for what is expected to be a booming sector in five or six years’ time.

The Government has also promised to free up swaths of state-owned land over the coming years to ensure that the country can raise its annual housing output to about 225,000 new homes a year, up from the 180,000 currently built each year.

But much of that new land is likely to be sold only to housebuilders that can prove their green credentials and guarantee to build carbon-neutral homes.

Barratt has built its own mini eco-village of seven houses in Chorley, Lancashire, to try to gauge both the cost of building energy-efficient homes and the energy savings they will produce.

The cost of making a typical home carbon-neutral in the Bristol area could add between 10 per cent and 20 per cent to the total build costs per plot, according to one chief executive of a housebuilding company who has examined the scheme.

“The extra cost could be £20,000 to £30,000 per plot. So, say for 150 homes, that is an extra £4.5 million. That may need to be subsidised in the sale. I don’t think English Partnerships will want to discount the sales price either,” he said.

Land in the Bristol area is selling for between £80,000 and £90,000 per unit.

Confirming that Barratt Homes had made the shortlist, Ralph Hawkins, its development director, said: “Barratt is extremely keen to deliver this development, not least because we have outstanding experience of implementing green technologies at our eco-village in Chorley.”

The extra technology needed to make a house carbon-neutral can include wind turbines, underfloor heating, solar panels, and even digging bore holes for tapping the earth’s natural heat from deep underground.

Barratt has calculated that the annual energy savings from these extra eco-friendly devices could be about £600 per year for a four-member family.

Greg Fitzgerald, chief executive of Galliford Try, a housebuilder not bidding for the Bristol site, said: “The big question is: will a housebuilder think he will get more for that three bedroom house which is being marketed as zero-carbon?

“My own feeling is that they [house-buyers] are not ready yet [to pay more]. I think, however, that the whole cost of zero-carbon homes will come down as their popularity takes off and land prices eventually will not be affected.

“People will in five or six years be more environmentally conscious. The more we as an industry do it, the cheaper it will become.”

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