Mother in £2.6m council house asks for cheaper home

Francesca Walker was moved into the large townhouse, which costs £1,755 a week in rent, by council chiefs in September and now has David Cameron, Hugh Grant and Richard Curtis as her neighbours.

It is the latest case in the clash between councils and the Government over housing benefit since it emerged that a family of Afghan immigrants were housed in a £1.2million Acton house.

Councils blame the Government for onerous legislation which forces them to rehouse homeless council tenants within the borough while the Department for Work and Pensions blames the council for not looking hard enough. Today, Miss Walker also criticised the system saying she was "not a greedy person".

She said: "I would rather not be here. Council housing would be fine for me. My personal circumstances are not really anybody's business - you just need to look at housing policy."

Experts today called for a reform of the housing benefits system, saying taxpayers should not be funding luxury lifestyles for those out of work.

Susie Squire, campaign manager for the TaxPayers Alliance, said: "At a time when people are struggling to make mortgage payments, this amount of money spent on amazing mansions sends a very bad message.

"Also, landlords have to stop exploiting taxpayers' generosity. Every week that goes by we are paying thousands of pounds.

"Councils need to work harder to find more affordable housing and we need to stop the greedy landlords. It's very clear that the system is broken - why isn't it being reformed?"

Miss Walker's neighbours also attacked the move. One neighbour in her forties who did not want to be named, said: "I was stunned when I found out they were living here at the council's expense. They are the first council tenants we've ever had as neighbours.

"You have to question the wisdom of the decision - it doesn't seem very efficient."

Another neighbour, 52, who also did not want to be named, added: "This is a very middle-class, high-earning street. We don't begrudge them the right to live here but it is not great value for council taxpayers. They've had amazing luck. It's far beyond most people's reach."

A spokesman for the Royal Borough of Kensington and Chelsea said the council's hands were tied. He said: "We are prisoners of the housing benefit system. When someone is homeless we have to find suitable accommodation.

School places and family connections severely limit any scope for moving people to cheaper areas. Kensington and Chelsea is one of the world's most expensive property markets and five-bedroom properties are in incredibly short supply.

"We are doing what follows from the housing benefit laws."

A spokesman from the DWP said: "We are reviewing the whole housing business system and will publish a paper in January. We want to make sure that it is fair to people who need support but that it is also fair to the taxpayer."

The Notting Hill house occupied by Miss Walker is owned by gynaecologist Nigel Armstrong who offered it for rent through Foxtons, and now lives in another west London borough.