The scheme succeeds the pound;250 million starter homes initiative which planned to put 9,000 workers in affordable housing by March 31 this year.
The new key worker scheme offers teachers four options:
* Loans of up to pound;50,000 will be available to help workers buy a home on the open market or a new properly built by a registered social landlaord.
* The London Challenge key teacher homebuy plan will provide higher loans of up to pound;100,000 for a small group of teachers with the potential to become the education leaders in the capital in the future.
* There will also be a shared ownership scheme for new properties, with teachers buying at least 25 per cent of the property and paying reduced rent on the rest.
* And an intermediate renting scheme will see rent charges set at a level between that charged by social and private landlords.
Mr Prescott said the Government was "determined to make a difference in the performance of our schools".
Teachers wanting to find out more about these options need to contact their relevant "zone agent", a registered social landlord who markets housing schemes for key workers.
For full details, telephone 0845 300 2820 or go to www.keyworkerliving.co.uk.
Full report, page 6