Peter Head, director of global consulting engineers Arup, is being urged to be a revolutionary. The encouragement is coming from officials in Shanghai, where Arup is planning the world's first zero-carbon ecocity on an island three-quarters the size of Manhattan, and London's mayor Ken Livingstone, who wants Head to pull off the same trick in Britain's capital city, albeit on a much more modest scale.

Head reveals that he was surprised when Livingstone, during a visit to China earlier this year, announced he was going to appoint Arup to masterplan a 1,000-home zero-carbon community in the Thames Gateway. "Ken announced it before we'd even discussed it," he says.

Livingstone considers himself a world leader on sustainability in cities, having assembled a 20-strong coalition of cities from across the globe last year to combat climate change. Last month, he announced that his strategic planning document, the London Plan, would be revised to require major new developments to connect to decentralised local energy services, powered by combined heat and power and renewable technologies, and that new developments will need to meet 20% of their energy needs from onsite renewables.

But Livingstone was blown away by the plans for the 東灘 ecocity, says Head, and by the strategic vision of the Shanghai Industrial Investment Corporation, which has signed up Arup to plan two more cities on the same principle of being self-sustaining in energy, water and food, with no greenhouse gas emissions in transport. Head, who sits on the mayor's sustainable development commission, says: "I remember Ken Livingstone talking about having seen the Dongtan project and how London had to get its act together."

But Livingstone is going to have to get his skates on if he expects to ever trump Dongtan. It is a reflection of a complete volte-face in China's approach to urbanisation. After decades of breakneck growth that has left China with 16 of the world's 20 most polluted cities, the most recent five-year plan, unveiled late last year, stated for the first time that environment and society could not be sacrificed to GDP. Energy and water efficiency have become strategic imperatives. "The government began to realise that their approach to urbanisation was unsustainable and risked tipping it into decline," Head says.

The first test for the new policy has been Chongming, a large island at the mouth of the Yangtze river that until now has remained undeveloped. The government wanted to build a bridge and tunnel to connect it to the mainland, but also to protect the island and its internationally important wetland from the rapacious development that would surely follow.

Visionary model

Dongtan emerged as the solution, a visionary model that would serve as a prototype for sustainable urbanisation in a country that needs to build 400 new towns to house 300 million people between now and 2020. It will be built as a collection of villages, with the first community of 80,000 ready for the Shanghai World Expo in 2010, and the population projected to grow to 500,000 by 2040.

Arup's brief is to minimise the city's ecological footprint - the amount of land required to supply its inhabitants with food, water, energy and other resources, as well as dispose of all its waste, including greenhouse gas emissions.

Herbert Girardet, a cultural anthropologist, who devised the theory of ecological footprinting and has been advising London as well as Arup on Dongtan, has estimated that Shanghai's footprint is more than seven hectares (17 acres) per person, while London's is about six. He argues that if the whole world lived at this rate of consumption, we would require three planets to support us. Dongtan's footprint will be two.

As well as composting and recycling all the waste the city will produce, and producing most of its residents' food needs, Dongtan will generate its own energy for housing and transport. Fellow Arup director Chris Twinn, who is devising Dongtan's energy strategy, is also looking at plans for the city to generate surplus energy to offset carbon emissions generated by importing goods and services.

"With Dongtan, a sustainable future is not some distant dream, but a vision that is actually being realised," Girardet says.

In London, the brief is nowhere near as ambitious, but may be more difficult to achieve. The Thames Gateway development, which will be built on an as yet undetermined brownfield site in the south-east owned by the city, is expecting carbon neutrality in energy use at a commercially realistic cost. "It will be a demonstrator model of how developers can go way beyond the London Plan with something that's commercially attractive and reflects ahead-of-the-curve thinking," Head says.

He doesn't underestimate the difficulty: "It's hellishly hard to make anything carbon neutral." But Head says that a joint venture earlier this year between EDF Energy and the mayor's Climate Change Agency to finance and develop decentralised energy schemes in the city will make it more viable for private developers to go low carbon. "In theory, it should be possible to join up different [commercial] interests and make it work."

And that is what Head, working with Greenpeace, is hoping to do with the Thames Gateway project. Although the brief is for 1,000 low-carbon houses, to bring about swingeing carbon reductions the homes will need to be part of a large mixed-use commercial development, Head says. This would allow Livingstone's preferred energy model: a renewably-powered community energy system that could generate heat, electricity and even cooling, delivered via local networks independent of the national grid.

There is political impetus for low-carbon building in the Thames Gateway, where 120,000 homes are planned. Earlier this month, housing minister Yvette Cooper announced: "We want the Thames Gateway to lead the way towards our long-term national target of 60% reduction in emissions by 2050."

But to Head, such statements must sound quaint. The Dongtan project will deliver by 2010 - if not before - what Britain is hoping for by 2050. Less than a year in, Dongtan is already running four months ahead of schedule.

"My perception is that China is now going five years faster than the rest of the world in everything it does," Head says. "The speed of building things is astonishing. In Britain, the sense of ambition and belief in what we can do just isn't as strong - although Ken Livingstone is catching some of that ambition."