By Paul Majendie

LONDON, May 13 (Reuters) - Britain's leader-in-waiting Gordon Brown, eager to seize the green initiative on a vital election battleground, on Sunday announced plans to build five environmentally friendly and affordable "eco-towns."

Polls show Brown, expected to take over next month when Tony Blair steps down after 10 years as prime minister, has a fight on his hands to combat the rejuvenated Conservatives under their young leader David Cameron.

In the run-up to the next election expected in 2009, the main political parties are vying to extol their green policies.

Britain has enjoyed a decade of economic growth during Brown's tenure as finance minister but critics say a housing boom has made thousands of people paper millionaires while others struggle to get on the property ladder.

"Young couples find it difficult to buy their first home," Brown told BBC Television. "There is a housing problem we have got to deal with," he acknowledged.

Laying out his environmental credentials, he said "We can combine the building of new houses with low carbon and carbon-free homes."

"I want to get to us building 200,000 houses in total as quickly as possible," he said. "The eco-towns will make their contribution to that."

The towns would be powered by locally generated energy from sustainable sources.

"A home-owning, asset-owning, wealth-owning democracy is what would be in the interests of our country because everybody would have a stake in the country," Brown said.

The Conservatives accused Brown of recycling old policy initiatives, but he insisted: "It's quite new."

The latest opinion poll showed that the ruling Labour Party's rating had climbed to its highest level in eight months -- but there was a nasty sting in the tail for Brown.

The Sunday Times poll put Labour on 34 percent, four points behind the Conservatives. But with Brown as premier, the gap would widen to 10 points -- 42 percent to 32 percent.

Voters said the best way for Brown to boost his popularity would be to cut immigration and pull British troops out of Iraq.

Blair's popularity plummeted after he sent British forces to join the 2003 U.S.-led invasion of Iraq and a Labour Party rebellion in September forced him to say he would quit within a year, opening the way for Brown to take over.

On Saturday, Brown said he planned to visit Iraq soon but he refused to set out a timetable for the withdrawal of British troops from the south of the country.

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