A Labour peer is suing his neighbour for digging under his land, in the latest basement extension row to hit Hampstead.

Shadow business minister Lord Mitchell claims Daphne Gillian Singer has “trespassed” onto his £3million property by tunnelling under a small courtyard, which is next to both their homes but which the peer owns.

He says Ms Singer, who was previously granted planning permission by Camden Council, has dug under the small courtyard as part of excavation work which began in January.

The peer and his wife Lady Mitchell claim they did not realise what was happening because Ms Singer erected hoardings which obscured the excavation work.

They have lodged a writ at the High Court and are seeking damages of up to £200,000.

They have obtained an injunction to suspend the work.

Ms Singer mistakenly believed she owned the land outside her front door in the courtyard. The basement extension was set to include two bedrooms and a lounge.