A flagship Conservative council is housing families in hotels costing more than £1,000 a week because it cannot find alternative accommodation.

Figures released by Westminster Council show it has used six hotels where a room for a week costs more than £1,000, with the most expensive, the Royal Eagle Hotel, costing £1,540.

The Labour group on the council claimed the costs are the result of housing benefit caps introduced by the Conservative-led government. These limit the amount of local housing allowance that can be claimed per week from £250 for a one bedroom property up to £400 for a four bedroom property.

Paul Dimoldenberg, leader of the Labour group, said: ‘Having lobbed heavily for the introduction of housing benefit caps, Westminster Conservatives suddenly find out that there are not enough homes available for those in housing need and are now having to pay massive weekly payment to four star hotels which are costing up to six times more than the housing benefit cap levels.’

Last week the BBC reported Westminster has spent £12,000 a month housing some families in hotels, and a total of £2 million in the first nine months of last year.

The Labour group said more than 120 families with children have been in hotels for more than six weeks. Legally councils are only supposed to place families with children in bed and breakfast accommodation when there is no alternative, and not for more than six weeks.

Jonathan Glanz, portfolio holder for housing at Westminster Council, said the authority was under ‘unique pressure’ due to the price of housing in the area and the number of people seeking accommodation.

‘Of those seeking council properties, a third actually have very little connection with Westminster, other than having spent the last six months here,’ he said. ‘Nonetheless, we have a legal duty to house some people in hotels and B&Bs while we assess their longer term needs.

‘We are actively sourcing more temporary accommodation as quickly as possible, and we have added more than 600 units of self-contained accommodation to our stock in the last year.

‘The cap on housing benefits means some of those who used to live in Westminster – one of the most expensive areas in the country - can no longer afford to do so at the taxpayers’ expense.’