TENANTS should be able to buy their home with only a five per cent initial stake to tackle a crisis in "social mobility", MP Alan Milburn said yesterday.

The Darlington MP and former Cabinet Minister called for a big increase in home ownership as the best route out of poverty for people with few assets.

And he called for a new right for parents with children in badly performing schools to choose an alternative state school.

Schools that accepted such pupils would get extra money for taking them, as much as 150 per cent of the cost of educating a child.

At present, council and housing association tenants wishing to get on the housing ladder must buy a minimum 25 per cent stake in their homes.

Leading a Commons debate, Mr Milburn said: "It should be something far more affordable -say five per cent. We should give every social tenant a right to own a share in their property.

"Low-cost home ownership programmes should be properly targeted at those regions with the lowest owner-occupier levels - such as London and the North-East."

Mr Milburn said home ownership, along with employee share ownership and a right for the poorest parents to choose a school, were key to tackling plunging social mobility.

This week, a London School of Economics study found that British children from poorer families have far less chance of improving their lives than in most other wealthy countries.

It said ten years of a Labour Government had done no more than prevent the decline in social mobility in the Seventies and Eighties from worsening.

Mr Milburn has previously warned that it may now be impossible for someone to repeat his success in moving from "a council house to the Cabinet table".

He said: "I am the product of the most socially mobile generation this country has ever seen.

"Today, that optimism looks hopelessly misplaced. In the decades since, birth, not worth, has become more and more a key determinant of life chances.

"Social tenants nowadays are much more likely to be low income and economically inactive than in previous decades, when I was growing up on a council estate."

Mr Milburn's views on home ownership are in line with those of new Prime Minister Gordon Brown, who has also called for a big expansion.