Fears are growing that the poor are being priced out of Hammersmith and Fulham after a City Hall report said cutting housing benefits will make the borough 'unaffordable'.

The document warns the £400 per week cap, due to be introduced by the government over the coming year, will mean rents for many of London's poorest residents will become too much.

Sent to the Work and Pensions Committee, it warns homelessness and evictions will rise and lists Hammersmith and Fulham as one of ten areas in the capital where the effects will be felt most.

It is calling on ministers to make H&F residents exempt from the cap but the council says there are no grounds for concern, insisting most tenants are living on rent within the £400 limit and that it was 'negotiating' with higher-charging landlords to reduce rates.

Councillor Lucy Ivimy, H&F Council Cabinet Member for Housing, said: "We take this issue very seriously indeed and are working hard on residents' behalf. The majority of families in the borough are on rent levels that are well within the national housing benefit cap.

"We are working closely with landlords to bring rents down to levels within the caps, reducing the impact on our residents. Indications so far are very positive and we anticipate that rents for many households who are currently above the caps will be successfully renegotiated."

But welfare reform minister Lord Freud admitted people will 'have to adjust to where they can afford'.

"That's nothing new," he said. "that process is nothing new and people adjust to where they can afford just like anyone else.

"This is just what it means to live in London."

The concerns of the Mayor's office come on the back of months of allegations from local Labour politicians that the council's plans to regenerate large swathes of its social housing stock will result in Paris-style 'social cleansing'.

In September Labour leader in H&F Stephen Cowan claimed 65 per cent of the borough's residents are earning below the national average and that ambitions to rebuild estates like White City and West Kensington would be unaffordable for the poor.

He said at the time: "We think you (the council) want to move the people out who live here and get new people in when you could be helping them look for a bigger home."

Council leader Stephen Greenhalgh called the allegations 'rambling nonsense'.