Ministers will later today announce a crackdown on thousands of council tenants who are making huge profits by sub-letting their homes illegally.

These fraudsters can in fact make up to £20,000 a year by moving out of their council home and renting it out to somebody else.

In a small number of cases, tenants have been found sub-letting up to three homes after moving between authorities.

A hotline will be set up in autumn to encourage neighbours to inform the council of these fraudsters, and council hit squads will target areas in order to obtain evidence.

Housing Minister John Healey, estimates that up to 200000 council tenants around the UK are currently sub-letting their council homes illegally.

At the same time, many are also illegally claiming housing benefit, costing taxpayers tens of millions of pounds.

Various evidence suggests that this illegal sub-letting occurs mainly in London, Manchester, and the other inner-city areas.

Healey has said that even if only 1 per cent of unlawful tenants were removed, this would free at least 20,000 council homes for the 4.5 million people on local authority waiting lists.