The developer behind proposals to build an eco-town near Weston-on-the-Green says it remains fully committed to delivering the scheme.

There is mounting speculation that only two of the ten eco-towns promised by the Government will get to be built. Over the course of the summer it emerged that up to a third of the 15 shortlisted schemes had either been withdrawn or substantially changed.

But a report in Sunday's Observer said that officials at the Department for Communities and Local Government have concluded that only "one or two" of the shortlisted projects are genuinely viable, according to a source close to the discussions.

The Eco-towns Challenge Panel, appointed by ministers to ensure the plans were genuinely green, is said to have reached similar conclusions.

Some bidders are also said to be ready to drop out in the face of rapidly falling houses prices and the collapse in home sales.

But Parkridge, which wants to build a 15,000-home settlement called Weston Otmoor near the A34/M40 junction, has made clear that it remains hopeful of making it on to the Government list of eco-towns.

Parkridge director Roger Sporle told The Oxford Times: "Parkridge remains fully committed to the Government's eco-town programme and the process of assessment which is currently under way. The Government has said it expects to announce the final locations in early 2009."

Detailed assessments covering transport and the scheme's financial feasibility, which are now being undertaken, will determine which eco-town schemes will go forward, Mr Sporle added.

And the Department for Communities and Local Government also moved to dampen speculation that the Government's plan to build environmentally-friendly settlements across the UK is in disarray.

A spokesman said: "We have consistently said we are looking to build up to ten eco-towns and have made clear that we will shortlist up to ten potential locations."

With 15,000 new homes proposed at Weston Otmoor, Parkridge stirred fresh controversy last month by pledging that at least one job will be provided in the new town for each household.

But the Government received a different message from Oxfordshire County Council, with a County Hall report condemning the scheme as "deeply flawed" and warning it should not be pursued.

The Weston Front, the campaign group leading opposition to the local scheme, held two meetings last night in Weston-on-the-Green.

A spokesman for the group warned: "Before we get too excited, we do know that, initially, the Weston Otmoor site was high on the Government's list of preferred options. Whether that has changed remains to be seen and we may still be in the 'one or two'."

The group believes the publication of Government findings on the viability of the schemes has been put back by the Cabinet reshuffle, which has given Margaret Beckett responsibility for eco-towns as the new Housing Minister.