The government last month declined Lee's earlier offers to donate land to build cheap homes for young people and told him to approach non-government organisations, such as the Housing Society.

Lee agreed to compromise. He said: "My wish is to let young people live in them. But everything will be decided by the relevant authorities." He is now offering to pay the land premium as well as the construction costs, and has also agreed that the flats will not be restricted for sale to young people.

He earlier hoped to donate just the land, leaving the government to waive the premium and pay for building the homes, so that they could be sold for as little as HK$1 million. Under Lee's revised vision, the flats would cost about HK$1.2 million.

Lee told the magazine that the new price tag would enable him and the society to cover the HK$900,000 cost of building each flat and estimated HK$300,000 land premium.

Marco Wu Moon-hoi, chairman of the Housing Society, said the society wanted a bigger role in the project, especially its design and construction.

"After all, the society is not a real estate agent. We have our mission and policy to stick to."

Wu said the flats' planning, design and construction were important because the society cared about building quality.

The society would also have to follow pricing formulas under the existing policy for subsidised housing, which takes into account buyers' ability to afford a flat and provides a discount to market prices.

"We can't fix the price arbitrarily because there will be confusion if a different price is set for another donation site later," Wu said.

The negotiations remained "optimistic", Wu added.

He said he expected the scheme would be finalised by the end of the year.

In January, the property tycoon first floated the idea of donating some of his land in the New Territories to build homes and sell them to young buyers to help them get into the property market.