HARD-LINE plans to reduce housing benefit for council tenants living in bigger homes 'than they need' have been described as 'morally bankrupt' by Hammersmith and Fulham's Labour leader.

The borough council is endorsing plans by the Government to slash pay-outs by up to 25 per cent for social housing tenants with spare bedrooms in a bid to reduce the country's £23billion a year benefits bill.

It argues the move is 'morally right' - but the borough's opposition leader, councillor Stephen Cowan, says it is quite the opposite and accused the council of stigmatising scial housing tenants while failing to build enough new affordable homes.

He said: "The Conservatives' position is factually wrong and morally bankrupt. They have taken a heavy-handed interpretation of the new legislation.

"Meanwhile 80 per cent of the homes they build are for overseas investors. They are stigmatising some of the most hard pressed families in the borough while doing nothing to deal with the housing crisis."

More than 800 borough families will be affected by the plans, which will see tenants with an extra bedroom having their pay-outs cut by 14 per cent and by 25 per cent if they have two or more spare rooms.

The council denied Mr Cowan's claims and insists it will make special exceptions for families with disabled children which, say, need to turn a spare room into a sensory zone, and it has pledged to implement the legislation 'fairly'.

But it backed the plans, with its housing boss Andrew Johnson saying: "At a time when the nation is broke, it is completely unfair for social housing tenants to receive a large taxpayer subsidy to live in oversized homes while hard working residents renting in the private sector, or paying a hefty mortgage, pay through the nose and can only dream of affording a spare room.

"We simply have to reduce the housing benefits bill which hard working taxpayers fork out for."

From this month, the authority is no longer granting new social housing tenancies for life except for elderly or vulnerable people. Instead, all new tenancies will be for five years, or two years in some circumstances.

FACT BOX

It costs £122 per week to rent a council three-bedroom home, while a similar property in the private rental sector costs on average £770.