Mayor Han Zheng said he planned to negotiate with district officials to allocate some of the land surrounding the massive complex for budget homes, the Shanghai Daily reported.

"I must stress that we don't expect housing prices around the Disneyland project to be too high," Han was quoted as saying at the municipal government's annual meeting.

The newspaper said the budget homes could sell for up to 50 percent less than market price.

Land surrounding Disney's five resorts around the world is normally highly sought after by hotels and restaurants seeking to cater to holidaymakers.

It has been estimated that Shanghai officials will have to pay six billion yuan (880 million dollars) in compensation to residents who are living on the four-square-kilometre (1.5 square mile) block of land where the park is to be built, previous state media reports said.

However, a quarter of residents and 60 percent of businesses have yet to sign resettlement agreements, the newspaper cited Yu Hong, head of the area known as Chuansha Town, as saying.

Authorities aim to relocate more than 2,000 homes and nearly 300 businesses by the end of June so the first phase of construction can begin.

Disney has not released any figures or a timetable for its first resort in mainland China, but the newspaper said the first phase -- a theme park, a hotel and shopping outlets -- would cost an estimated 25 billion yuan.

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