A slumping world real estate market has given new impetus to Morocco's plans to demolish its shanty towns, where decades of state neglect have bred despair and religious extremism.

As demand for luxury homes and tourist facilities falls in the wake of the global financial crisis, Morocco's property firms are making the most of a state-backed scheme to re-house four million slum dwellers in new flats.

Developers are offered cut-price land if they sell some floors of their apartment blocks to slum families below the market price. The families receive grants to help them pay.

Thirty towns have been cleared of slum areas since 2004 and 50,000 shacks were destroyed last year, Housing Minister Taoufiq Hejira said in January. He is aiming for similar numbers this year.

Zahidi Elarbi, a member of a voluntary development association in the Casablanca suburb of Sidi Moumen, said about half the residents of its most notorious slums - Thoma and Douar Esquila - have been rehoused.

"Sidi Moumen has completely changed, although there is still a severe lack of services," said Mr Zahidi.

Poverty and joblessness were still a serious problem, he said, "but better to be idle in a new apartment than a slum".

King Mohammed has announced the construction of 130,000 social housing units worth $1.83 billion by 2012 and several firms, including Morocco's biggest real estate developer Addoha, have announced a new focus on low-income housing.

The North African country's biggest building materials manufacturer, Lafarge Ciments, says demand for its cement is likely to grow this year thanks to the social housing projects.

The scheme was launched after 14 young men from the slums set off bombs in the centre of Casablanca in May 2003, killing 45 people including themselves.

It was a shock for a country proud of its social stability and showed the growing influence of radical Islamic preachers in neighbourhoods abandoned by the state.

Most of the bombers were from Sidi Moumen, home to thousands of breeze-block shacks with metal roofs held down by rocks.

Several unofficial mosques opened in Sidi Moumen in the 1990s, some with radical imams who organised vigilante squads to patrol the slums and punish crime and immoral behaviour.

The mosques were closed or demolished after the 2003 attacks, when the state tightened control over religious preaching.

More radicalised youths from Sidi Moumen blew themselves up in 2007, killing a police officer, and for many Moroccans Sidi Moumen is still a byword for extremism.

"When a bus passes by with Sidi Moumen marked as its destination, passers-by sometimes shout 'Boom!'," said former resident Saida Fikri.