£750m of housing benefit was lost last year through fraud and error.
Up to half that sum was lost through fraud, according to the first national statistics on the problem, produced by the Department for Work and Pensions. Mistakes by councils, claimants or the DWP accounted for a further quarter.

The report looked at cases from every British council but did not give fraud figures for each authority.

The DWP has a target to reduce fraud and error by a quarter by 2006.

The Liberal Democrats said the government lost more through housing benefit fraud than it collected through tuition fees.

The figures were published as the DWP announced it would match the information councils collect on housing benefit claimants with other data the department holds on them.

For example, the government could compare the number of children mentioned on a family's housing benefit application with the figures on its child benefit claim.

The DWP will make the comparisons once a month and cases with high levels of fraud and error will get extra reviews. Fraud investigators could visit persistent offenders.

The department already uses similar data-matching to reduce fraud in jobseeker's allowance and income support payments.

Councils said the changes would reduce fraud without significantly increasing their workload. Chris Philips, revenues manager at Castle Morpeth council in Northumberland, said: "While [data-matching] will increase work, other aspects will reduce work. For example, we won't have to do renewal claims so it's more efficient overall."

Claimants no longer have to fill in new forms each year, a move designed to reduce administration.