Foreign Secretary William Hague today condemned Israel's plans to build hundreds of new homes in the West Bank, branding the proposal provocative and urging the administration of Israeli prime minister Benjamin Netanyahu to change its approach.

Officials announced on Wednesday that the homes would be built in a number of Jewish settlements, amid a row over government plans to demolish an illegally built settler enclave elsewhere in the Palestinian territory.

The move was widely seen as an attempt by Mr Netanyahu to appease anger over the dismantling of the Ulpana enclave. He persuaded Israel's parliament, the Knesset, to vote down proposals to legalise settler outposts such as Ulpana built illegally on privately held Palestinian land.

But Mr Hague said that the solution of building more homes in authorised settlements within the area earmarked for a future Palestinian state set "a dangerous precedent".

In a statement issued by the Foreign Office in London today, Mr Hague said: "I condemn the announcement by Israel to authorise the building of 851 new settlement units across the West Bank.

"While we appreciate the Israeli government's efforts to avoid damaging legislation in the Israeli Knesset by voting against a bill to legalise West Bank outposts, the decision to move settlers from an illegal outpost by creating housing units in settlements elsewhere across the Green Line sets a dangerous precedent.

"Such outposts are illegal under both Israeli and international law and should be removed entirely.

"The British Government, and our EU partners, have made it consistently clear that settlement construction is illegal under international law, an obstacle to peace and should stop immediately, in line with Israel's own commitment under the 2003 road map.

"Continued systematic settlement activity, and repeated breaches by the Israeli government of international law, is provocative, undermines the prospects of peace between Israel and the Palestinians, and makes the two-state solution ever harder to realise. It makes it increasingly difficult for Israel's international friends to defend the Israeli government's actions.

"I urge the Israeli government to change its approach, to meet its international obligations fully and for both sides to engage constructively in the search for peace."