The London Green Belt has been in place since just before World War II when Patrick Abercrombie's study recommended establishing a ring around the city which would remain unsuburbanized (one hesitates to say undeveloped, as farms are there). Now with the housing shortage, people are again suggesting the Green Belt is "a success we should build on":
Build on the green belt, and build now-Comment-Columnists-Minette Marrin-TimesOnline
Back in the day, the solution was to build new towns outside the Green Belt. Gordon Brown is proposing more of these. Towns like Welwyn and Letchworth were built as Garden Cities by Ebenezer Howard, and, but, by design are relatively small (on the order of 33,000 residents for Letchworth, 55,000 for Welwyn Garden City). From my visits, they seem excellent places to live, though the scale may be slightly off outside the town center (the residential density is a bit low, creating excessive walking distances).
Stevenge, (population 80,000) a post-war new town, (built on a much older town) is very much like Columbia, with large elements of Radburn, many pedestrian tunnels to access the town center and train station. There are also traffic roundabouts everywhere, so cars need not stop at signals. I felt like I grew up here.
Milton Keynes (population 185,000) on the other hand is much larger, but terribly overscaled, with large gaps between the residential and downtown areas. This creates opportunites for infill, but in the meantime there is an excessive amount of surface parking in the town center. Unlike the other towns I named above, the shopping mall (the largest single level mall in the world?) is disconnected from the train station.
Despite its imperfections, this model of new towns has a number of advantages over just adding another suburb in the Green Belt. They provide (or at least can provide) a coherent center and place. By increasing "surface area" they reduce the distance between people and the countryside. Every development in the Green Belt makes existing Londers that much farther from the country.
Now, one might suggest if the Green Belt is to be preserved, it should be done the right way, by buying the land (or development rights), rather than by fiat or regulations. This certainly seems a better way of controlling the use of land if property rights are to be respected. But the point here isn't about the mechanics of how land should be preserved, but about what constitutes a better urban form
A) A giant unbroken conurbation where rings of development are fully contiguous
B) A large conurbation with satellite cities.
The latter, while it might increase average distance to the center, decreases distance to the edge. It also provides more variety and differentiation of the bundle of attributes that we call property.
Perhaps the market should decide, but the market fails in providing numerous public goods (access to the countryside being an example), as some things are very difficult to establish easily enforceable rights for.