A record number of homeless families stayed in bed-and-breakfast accommodation in Brighton and Hove last year.
Almost 300 families stayed in temporary accommodation, more than in any other unitary authority in England, government statistics revealed today.
Ministers accept the city needs help tackling the problem.
But today's survey shows despite a government pledge to end homeless families staying in B&Bs, the number increased from 282 in 2001 to 291 in the year to March 2002.
The figure has been rising steadily since 1997, when the it stood at 135.
In June, The Argus revealed the city council had been awarded £575,000 towards its homelessness strategy from the Government.
A main aim of the strategy is to reduce the number of people in temporary accommodation.
A council spokesman said: "We regret the increase in homeless families in B&Bs.
"High housing prices and rents, combined with the diminishing of affordable housing stock through right-to-buy, have unfortunately led to more and more people wanting to get on the city's housing register.
"We are committed to reducing the use of B&B accommodation to emergency cases only and our temporary accommodation team is working hard to procure alternative accommodation from the private sector.
"This includes work to get empty private properties back into use."
On a visit to Brighton in July, the Government's homelessness tsar, Louise Casey, said the £575,000 was to provide alternatives for families in B&Bs - such as the rented sector.
But the city's Tory housing spokesman, Peter Lewis, called on the Government to help "bridge the financial gap" between housing benefit and rents in the city.
Council chief executive David Panter said the council had lobbied the Government for an increase to housing benefit payments.
He said the average rent for a one-bedroom flat in the city was £61.06 more per month than the income from housing benefit.
Housing minister Lord Rooker said the cash injection should ensure that, in the next year, families would either move out of, or never end up in, B&Bs.
He said: "We should not tolerate children being forced to stay in overcrowded and expensive B&Bs for weeks, months and sometimes years on end.
"Living in a cramped room without anywhere to do their homework or to play does not give them the start in life they deserve."
The Government has already issued advice to councils on the arrangements that should be put in place to ensure all babies and children placed in temporary accommodation receive health and development checks from health visitors.
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