At the Labour Conference in Manchester, Balls said that there should be a two-year stamp duty holiday for first-time buyers to help kick-start the economy.

“The Government is anticipating a windfall of up to £4bn from the sale of the 4G mobile phone spectrum,” Balls said.

“Let’s commit that money from the 4G sale and build over the next two years: 100,000 new homes – affordable homes to rent and to buy – creating hundreds of thousands of jobs and getting the construction industry moving again.

“Add to that a stamp duty holiday for first-time buyers, and we can deliver real help for people aspiring to get on the property ladder.”

Independent housing expert Henry Pryor said a stamp duty holiday for first time buyers only provided relief to between 10,000 and 13,000 house buyers.

“Reducing stamp duty doesn’t make houses less expensive, the better idea is to increase supply,” he said.

John Cridland, director-general of business lobby group the CBI, welcomed more action on housing investment, saying this would give a much-needed boost to growth.

“But such action must complement continued efforts to reduce the deficit,” he warned. “The two must go together, it cannot be an either or.”

However, the idea of using the proceeds from 4G for house building was attacked by technology investment charity Nesta, which called it “another example of government and opposition’s fetish for concrete”.

Geoff Mulgan, Nesta chief executive, said: “Because the proceeds of the 4G auction (estimated at £3-4bn) are the result of scientific and technological innovation, we should be investing them back into the next generation of science and technology to drive innovation and economic growth,” 

“This will have a bigger impact on long term growth and jobs.”

The Labour leadership is also under fire from trade unions over its support for the public sector pay freeze.

GMB leader Paul Kenny said Balls would “give an aspirin a headache”.

“You can’t stimulate the economy if the poorest people in the land are effectively being wage freezed for three years,” he said.