Sussex Police have been charging up to £1,700 a night to accommodate immigration detainees in their cells.
The rate charged to the Immigration Service, revealed in a Home Office report, is higher than the cost of an overnight stay at Brighton's five-star The Grand hotel.
The average cost of accommodating detainees was £360 per night but Sussex Police charged £1,700, the second highest rate in England and Wales.
The Home Office is calling for the system to be standardised to bring the charges in line with those paid by the prison service, which pays a flat rate of £110 for 24 hours' use of police cells.
Such an agreement between the immigration service and the police could save up to £7.75 million per year throughout England and Wales.
But a Sussex Police Authority spokesman said the figures pre-dated a September 2003 review of charges and its prices have now been slashed.
He said: "Our custody facilities are charged on a sliding scale that commences at £350 for up to eight hours and rises by £200 increments for each eight-hour period after that.
"This is not a cell-only cost.
It includes a range of facilities and services including medical examinations, interpreters and interview facilities."
The figures were obtained by studying police invoices between December 2002 and May 2003.
Based on these invoices a room at The Grand hotel costs about ten times less than a night in the cells courtesy of Sussex Police.
Rooms start from £120 a night and include an evening meal.
The report found the immigration service was forced to rely on the police because its own facilities were full.
In the financial year 2003/04, the immigration service used police cells across England and Wales for 31,033 nights at a total cost of £11.17 million.
The report said: "The cost to the immigration service of detention in police cells is both large and varied - from £55 to more than £2,700 for a 24-hour period.
"Some police authorities do not charge at all but these represent a very small proportion of overall police cell usage."
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