The government has abolished Labour's Infrastructure Planning Commision (IPC) after just one year, with approval for major projects now resting with ministers instead.
The IPC, which was designed to speed up the approval process for schemes like airports and nuclear power stations, was popular with the construction industry because it promised an end to costly and lengthy planning inquiries.
Instead, a Major Infrastructure Planning Unit will be established in the Planning Inspectorate to fast-track bigger projects.
National Policy Statements, the Government's blueprints for future infrastructure planning, will be put before Parliament for ratification.
Before the election, the Tories had called the IPC undemocratic, as it took planning planning decisions away from ministers.
They have promised that under the new system, ministers will be forced to consult local communities and take account of any objections when considering planning applications.
Communities may also have their council tax reduced if they agree to any major new construction projects on their doorstep.
Decentralisation minister Greg Clark said: “New infrastructure is critical to the country's return to economic growth and we believe we must have a fast-track system for major projects - but it must be accountable.
“The previous system lacked any democratic legitimacy by giving decision-making power away to a distant quango on issues crucial to every community in the country.”
But the Institute of Directors had doubts about the decision. Director general Miles Templeman said: “It's very important for economic growth that major transport and energy infrastructure projects are approved and delivered in good time.
“We remain concerned that if decisions rest with ministers, projects will be delayed or blocked for political reasons.”