Treasury Secretary Danny Alexander has hit back at his Liberal Democrat Cabinet colleague Vince Cable over claims the Government is in danger of stoking a new housing market bubble.
Amid signs of tensions at the top of the party as it began its annual conference in Glasgow, Alexander flatly ruled out calls by the Business Secretary for a rethink of the second stage Government's controversial Help to Buy scheme which comes into effect in January.
Cable has warned that providing Government guarantees for low deposit mortgages risked stoking property prices - creating a dangerous new asset bubble - just as the economy was beginning to pick up.
Treasury Secretary Danny Alexander has hit back over claims the Government is in danger of stoking a new housing market bubble
However Alexander said the concerns of the Business Secretary - who represents Twickenham in south west London - would simply not be recognised across most of the rest of the country.
"We are a million miles away form a housing bubble in this country," he told Sky News's Murnaghan programme .
"Of course in central London, in Kensington and Chelsea, you see very high house prices but I don't think we should allow the tail of central London to wag the dog of this policy.
"I don't think that we need to rethink this policy, not least because we have always said it's a time-limited policy for three years, after which the Financial Stability Committee of the Bank of England will be able to make a judgment.
"But right now the problem in this country, the problem in my constituency in Inverness or here in Glasgow or across vast swathes of England and Wales is not a housing boom, it is getting construction going, it's getting opportunities for people to own their own home. That's the problem we should be dealing with now."
Lib Dem leader Clegg acknowledged on the BBC's Andrew Marr Show said that ministers will have to be "vigilant" to ensure that a new house-price bubble does not develop as a result of Chancellor George Osborne's flagship Help to Buy scheme.
But he played down fears, expressed by Cable, that offering loans to help house-buyers afford home deposits could fuel a damaging spiral in prices, particularly in London and the South-East.
The DPM said: "What Vince said is absolutely right, that given the sorry history of asset bubbles in the British economy, we need to be vigilant.
"Of course we are going to be vigilant, but as Vince will be the first to acknowledge, we are nowhere near yet the peak of that unsustainable housing bubble.
He added: "If there's another bubble, the Bank of England and the Government of course have means by which we can anticipate that and ensure that that doesn't happen again."
Asked if Help to Buy was "putting more air into the bubble", Clegg said: "We are putting a little bit more air into giving credit-worthy customers the ability, not irresponsibly, to borrow money in order to get their feet on the first rung of the property ladder. There is nothing wrong with encouraging people to do that.
"Clearly in parts of the country - notably central London - the housing market is now marching forward, but you can't set a national policy, neither the Government nor the Bank of England, based only on what happens in Kensington and Chelsea. You have to think about all the other households."
Clegg said that the most important part of the Government's housing policy was a drive to build more homes. A motion at this week's conference would allow local councils to play a greater role in building more affordable properties in their areas, he said.
"It's the lack of building of houses in sufficient numbers that has blighted our housing market for too long," said Clegg.
The Help to Buy programme was the centrepiece of George Osborne's Budget in March. Unlike Cable - who has had repeated clashes with the Chancellor in government - Alexander enjoys a good relationship with his Conservative boss at the Treasury.
Meanwhile, the flagship Lib Dem policy of a "mansion tax" on residential properties worth more than £2 million came under attack from the economist ex-wife of former Cabinet minister Chris Huhne.
Vicky Pryce told the Mail on Sunday: 'It is a tax that is set at an arbitrary level with no economic justification for that level or the rate imposed... It is a myth that there is a magic source of income available from taxing houses."
Deputy Prime Minister Nick Clegg told the BBC on Sunday that the party's commitment to a mansion tax on properties over £2 million, raising £2 billion, sent a signal that "even though we are committed to deficit reduction" that would not be achieved entirely through spending cuts.
"What we are very clear about is, in the same way that I think the Conservatives left to their own devices would say that all further deficit reduction has to come out of spending reductions on public services, we say 'no, taxes and particularly taxes on people who can afford it, have to play some role in the ongoing effort to making sure that we complete the job of filling the black hole in the public finances," he said.
"If the Conservatives don't want to do that then they need to tell people, and that's part of the debate we will have to have over the next year-and-a-half, what they will cut - schools or hospitals or pensions or police or the armed services - to make up that £2 billion."