Rachel Reeves’s attempts to overhaul Britain’s planning laws have been dealt a blow after a senior lawyer whom she appointed as an adviser decided to leave the government after just four months.

Catherine Howard will leave the Treasury when her contract ends on 1 January, despite having been asked informally to stay on indefinitely.

Howard is understood to have warned the government against pushing ahead immediately with some of its more radical proposals to sweep aside planning regulations in an effort to encourage more infrastructure projects.

Her decision to leave the post comes amid disagreements at the top of government about how far to push its deregulation agenda, with some senior officials warning that Keir Starmer’s latest attempt to kickstart major building schemes could damage EU relations.

Disquiet is also growing among some Labour MPs, with 30 writing to the prime minister this week urging not to push ahead with some of his more radical planning reforms.

Howard said in a statement: “Over the past four months I have thoroughly enjoyed my time as the chancellor’s infrastructure and planning adviser, and in my time have had the ability to advise HM Treasury and help steer the important steps the government is taking to improve the planning system to support economic growth.

“I look forward to continuing my engagement with HM Treasury and government as I return to the private sector.”

Starmer and Reeves have put planning at the heart of their push for economic growth, which has so far struggled to gain traction, with figures released on Friday showing the economy shrank 0.1% in the three months to October.

Howard was appointed in September to help advise Reeves on planning changes leading up to the budget, in a move welcomed by senior government officials and some Labour MPs. Chris Curtis, the co-chair of the Labour Growth Group, said at the time she would be an “exceptional addition” to the Treasury.

Curtis told the Guardian: “Catherine has made a major contribution during her time at the Treasury, not least in ensuring the largest changes to planning in a generation will soon be passed into law. Her expertise has been a great asset to government.”

Howard was then asked to stay on as long as she could because the Treasury found her advice helpful, but she decided to leave in January to return to her role as a partner at the private law firm Herbert Smith Freehills Kramer.

While in government she is understood to have disagreed with Starmer’s decision to announce he would fully adopt the recommendations of a review into building nuclear power stations more quickly, written by the economist John Fingleton.

Starmer said in a post-budget speech last week: “In addition to accepting the Fingleton recommendations, I am asking the business secretary to apply these lessons across the entire industrial strategy.”

Fingleton made a number of suggestions, including changing rules around protected species and increasing radiation limits for those living near or working in a nuclear power plant.

He suggested that infrastructure projects should pay a large, pre-agreed, upfront sum to government quango Natural England in lieu of protecting or replacing habitats lost to development.

His review also recommended making it more costly for individuals and charities to take judicial reviews against infrastructure projects.

Fingleton told the Guardian earlier this week: “We need to have a more mature relationship with risk. Projects often do not go ahead because of concerns about safety but often all you are doing is moving the risk somewhere else.”

Howard believed Starmer should not have accepted his recommendations to rip up EU derived habitats laws before taking legal advice on whether they complied with legally binding nature targets and trading arrangements with the EU.

She was bringing forward concerns shared with government departments including the Cabinet Office and the environment department, which said the review could jeopardise trade with the EU and lead to widespread habitat destruction.

Those concerns are also shared by some Labour backbenchers.

Chris Hinchliff, Labour MP for North East Hertfordshire, has been leading a campaign against the review.

He said: “It’s time our Labour government stopped pitching nature as the enemy of a better life for ordinary people in this country and realised that, for the vast majority, it is a measure of it.”