Birmingham City Council is considering drawing up "green covenants" when selling land to the private sector, forcing firms to back promises of sustainable development with hefty up front cash deposits.
Companies would be required to hand over bonds, which could amount to millions of pounds in the largest housing and offices schemes. The money would be returned only if the completed project met the highest sustainability standards.
The proposal is one of several radical ideas from the council's climate change scrutiny committee and is being considered by officials. If adopted quickly, the covenant system could in theory be used during the sale of the Digbeth wholesale markets site, which is expected to net more than £200 million.
Prospective American purchaser Hines could be asked to pay an additional bond in order to guarantee a sustainable development.
There are signs, however, that the council's political leadership is uncomfortable with the idea.
Deputy council leader Paul Tilsley, who has special responsibility for the sustainability agenda, said demanding bonds from firms could stifle development in the current uncertain economic circumstances. It would be better to use the council planning committee to impose sustainability requirements when granting permission and to enforce standards following the completion of building work, he believed.
Coun Tilsley (Lib Dem Sheldon) added: "When the economy is buoyant we are very much in the driving seat. But looking at the commercial property on the market at the moment I am mindful that sold signs are appearing and then, because of the credit crunch, the signs are taken down and it's back on the market again."
Steve Bedser, who chaired the climate change scrutiny committee, admitted there was "considerable resistance" to the idea among council officers.
Coun Bedser (Lab Longbridge) said letting financial concerns stand in the way of introducing sustainability bonds was tantamount to allowing short term economics stand in the way of long term gains for the city.
He added: "I could give evidence of developers promising gold-standard facilities, but when the development is finished the facilities are either not there at all or nowhere near as fantastic as they claimed when getting planning permission.
"What we are proposing is a simple mechanism that says to developers, put your money where your mouth is. If you deliver, you can have your money back."
He was concerned about delays in bringing a Sustainable Development Action Plan to the council cabinet. The document, a key recommendation from his committee, was to have been finalised by November 2007, but is unlikely to be approved until the end of the year.
A recommendation that all new developments in the city provide a minimum of 15 per cent of future energy needs from on-site renewable energy sources has also not yet been adopted by the cabinet.
Sustainability training courses for all council staff were to have been introduced at the beginning of the year, but are unlikely to start before the summer.
The sustainability bond proposal was given a cautious welcome by Birmingham Chamber of Commerce and Industry chief executive Jerry Blackett, who said market forces were increasingly requiring developers to deliver sustainable buildings.
"I am very aware that developers are already planning for these sorts of costs," he added.
Mr Blackett said the council should be in no doubt that the cost of bonds would be passed on, in the form of more expensive housing, but the payment of a deposit would be a useful incentive.
"I am cautiously optimistic that this takes us to a better place," Mr Blackett said.
Claims that the council is dragging its heels on sustainability issues were denied by Coun Tilsley, who pointed out that the city's Strategic Partnership recently approved a sustainable procurement strategy - committing public agencies and businesses to "consider wider economic, social and environmental impacts in all of their individual buying decisions".
The council is to stage a climate change festival in June, the only one of its kind in the country.