Westminster faces losing up to �80million over ten years in government grants, after census results marked a fall in the borough’s population.

The 2011 census showed the borough had 219,400 residents, down from 241,000 the year before.

Westminster council, who estimate the borough’s population at 253,100, are calling on the Office for National Statistics (ONS) to disclose the data on how it arrived at the figure.

Cllr Melvyn Caplan, cabinet member for finance and customer service, said: “The council does not believe that the census figures produced are credible, given all the alternative sources of data indicate a much higher population.

“The Census may work well for much of the UK, but with a third of our population moving in or out of the borough on an annual basis it is exceptionally difficult for a ‘one size fits all’ survey to accurately count the population in Westminster.”

The government base yearly grants to town halls on census results, looking at population size and statistics showing deprivation and poverty.

Labour councillors warned of an annual loss of �8million in funding over 10 years if the “obviously wrong” population estimate is not corrected.

Labour group leader Cllr Paul Dimoldenberg said: “Everyone who lives in Westminster knows that there are more people living here than in previous years. There are more homes being built, more young people at school and more people registered with their local doctor.

“At a time of growing poverty, increasing unemployment and massive public service cuts, we cannot allow services to be cut any further, particularly as a result of bureaucratic bungling by ONS.”

In the 2001 census, the ONS had to add 17,500 to its original estimate of Westminster’s population after admitting accounting mistakes.

A spokesman for the ONS said: “Westminster City Council is one of a small number of local authorities that have asked questions relating to the first release of 2011 Census population estimates.

“We have met with them and following this meeting the council has submitted a number of written questions. These are currently being considered and answered.”