The federal government has unveiled its blueprint for the future of the nation’s 18 largest cities with a warning that it’s prepared to “intimidate” opponents if necessary.

The National Urban Policy, released by federal Infrastructure and Transport Minister Anthony Albanese on Wednesday, sets out a broad range of principles designed to underpin long-term urban growth and improve productivity.

Among the problems the policy aims to tackle is traffic congestion, which Mr Albanese said would cost Australian business and families more than $20 billion by 2020 if left unchecked

The policy promotes better infrastructure planning and public transport, reducing carbon footprints and improved urban planning to meet the challenges of a population growth, an ageing population and climate change.

Future federal infrastructure funding will be linked to the policy and other development plans that individual states and territories have been ordered to produce by January 2012.

Mr Albanese on Wednesday insisted the policy was not a federal takeover of existing state and territory responsibility for urban development.

But he indicated that state and territory leaders would have to toe the line.

“What this is, is the commonwealth … putting in place all the levers at our disposal to drive, foster, encourage, and if you like intimidate recalcitrants, if need be, to make sure they do get on board,” he told a Property Council of Australia breakfast in Sydney.

The Council of Capital Cities Lord Mayors (CCCLM) backed the National Urban Policy.

“Today’s policy announcement is highly symbolic and highly anticipated after three years preparation,” CCCLM chair and Lord Mayor of Hobart Rob Valentine said in a statement.

“It is an important recognition of the national and international role our cities play, and the future challenges and opportunities they face.

“What’s needed now are the partnerships between governments, backed by enough dollars to drive real change.”

The nation’s 18 biggest cities are home to three in four Australians, produce 80 per cent of national income and generate 75 per cent of its jobs, the government says.

They include every state and territory capital and large regional centres, such as Newcastle, Toowoomba and Sunshine Coast.