The report, Garden Villages, was written for the Policy Exchange think-tank by Lib Dem peer Lord Taylor, who carried out the government’s review of planning guidance.
The document plays down the idea of new garden cities, saying any proposal for a "new city of 80,000+ homes" would be "immensely politically difficult".
Instead, it says that over one million new homes could be built over the next decade if each of the 353 councils in England built one garden village of 3,000 homes.
It says that a key measure to deliver these new settlements would be a return to the "green belt deal".
"This was the deal offered by the garden city movement and more explicitly by the new towns: allow protection of green fields around traditional communities in return for agreeing the new communities".
This would rule out planning by appeal around existing towns and villages for local authorities making these allocations.
The report recommends that locally-led development corporations would be charged with master-planning, setting quality design standards for the construction, and allocating some of the plots to self builders and housing associations, for a new wave of garden villages.
The document also says the New Towns Act should be amended to:
Empower local authorities to use the New Towns Act to designate sites for new small market towns and villages typically consisting of up to 5,000 homes as part of their local plans.
Allow local authorities to pay fair compensation to homeowners and landowners affected by the new development at a flat rate of 150 per cent of market value at the existing use.
Ring-fence the subsequent land value uplift for the new community to provide for its infrastructure and amenities.