A cross-party group of politicians has been set up by Camden Council to demand the government grant “a fair deal” on compensation for Londoners affected by the High Speed 2 rail link (HS2).

The Fair Deal for London Alliance, announced this week, warned the city “stands to lose the most from HS2” but that its residents, many in Camden, have “the worst compensation deal in the country”.

The group of MPs and council leaders has called for a tailored compensation package for Londoners affected by the £50bn project, citing a mismatch between compensation given to those living in rural and urban areas.

In a letter sent to the secretary of state for transport, Patrick McLoughlin, on Monday, the politicians called for “adequate replacement housing for people unable to live in their homes during the construction period of HS2, mitigation and compensation for residents who remain in their homes surrounded by building works, and up front compensation for businesses to offset loss of trade and property values”.

It also launched a government e-petition seeking to obtain a debate in parliament on the subject.

With the main London terminal for HS2 set to be situated at Euston station, Camden will be one of the areas most affected by the £50billion transport link.

About 250 homes in the borough could be made uninhabitable during the construction phase and many roads running through the borough, including in Hampstead, are earmarked as major transport routes for Heavy Goods Vehicles taking material to and from HS2 construction sites.

The group also cites data claiming 95 per cent of homes identified as being significantly affected by noise or vibration during the construction of HS2 are in urban areas.

Cllr Sarah Hayward, leader of Camden Council, said: “London stands to lose the most from HS2, with Londoners set to suffer over a decade of disruption from multiple construction works.

“Hundreds of residents and businesses are set to be left out of pocket due to the inadequate compensation package proposed.”

Cllr Phil Jones, Camden Council’s cabinet member for transport, added: “People will still feel an impact in and around Hampstead and so deserve compensation.”

The alliance has plans to grow its membership but is currently made up of six London MPs, including MP for Holborn and St Pancras Frank Dobson, along with leaders of Camden, Hillingdon and Ealing councils.

Glenda Jackson, MP for Hampstead and Kilburn, said she wasn’t aware of being asked to join the group, but added: “I can’t imagine anyone not wanting to fight for fair compensation on HS2”.

A spokesman fors the Department for Transport said: “We have announced compensation and assistance schemes that go well beyond legal requirements.

“We appreciate rural areas will feel the effects of HS2 more than urban areas, where major construction projects are commonplace and properties relatively close to railways or building sites are often shielded from their effects by other buildings and background noise.”