£250,000 prize for housing solution
Lord Wolfson, chief executive of Next, is offering the cash prize to anyone who comes up with an "ambitious" plan for a new garden city.
Launching the competition, the Conservative peer suggested a public debate on Britain's housing crisis was long overdue.
He said: "Cities and building new homes needs public debate, and it just isn't happening. And Britain can do something fantastic. We can be ambitious about what we build, but we need to talk about it, we need to think about it."
According to Lord Wolfson governance is a key issue.
"The trouble with too many local authorities is that they're only looking at the interest of the people who are already there and not at the interests of the people who might come and live there," he said.
"And so one of the big questions has to be how will this new city govern itself? How will it give the people a share in the value that's created?"
Lord Wolfson said that over the past three decades "we've trapped ourselves in urban cordons that are so hard to get out of, that we give ourselves the impression that there's no countryside left".
He pointed out that 92% of Britain remains undeveloped.
"We just don't see it because we're stuck in traffic jams trying to get in and out of our city centres," he said.
"There is an enormous amount of land that could be developed, and developed not into urban jungles, but into beautiful garden cities with parks and waterways, areas that are more biodiverse than the agricultural monoculture that they replace."
Lord Wolfson said what Britain badly needs to address the housing problem is "imagination", as well as courage.
He said: "Courage, confidence in the future and we can build something that is better than what we've got at the moment."
In 2011, Lord Wolfson launched a contest offering a £250,000 reward "for an individual to come up with a plan for how the euro could be safely dismantled".
The winning entry was submitted by a team led by Roger Bootle from macroeconomics research consultants Capital Economics.
The plan recommended that exiting members should introduce a new currency and default on a large part of their debts.
Housing minister Kris Hopkins said: " The previous administration pledged 10 so-called eco-towns. The top-down programme built nothing but resentment.
"This Government's focus is on helping communities deliver ambitious locally-led housing growth through the Local Infrastructure Fund. This programme has already seen success, with bespoke solutions for 11 large-scale, locally-supported housing schemes to date, unlocking delivery of up to 69,000 new homes.
"We are working closely with councils and developers to unlock a further 12 stalled schemes, capable of delivering an additional 40,000 homes, and in the new year £102 million will be made available to help communities deliver their housing ambitions. This is on top of the 400,000 homes we've already delivered since 2010."
© 2013 Press Association