Labour councillors in Westminster have condemned the Conservative-controlled authority for resuming selling homes to people other than sitting tenants. They claim the revised policy is identical to that criticised by the district auditor as 'disgraceful, unlawful and unauthorised.

Up to 140 council-owned properties, mainly one-bedroom flats, will be sold to those on the list of people waiting to buy homes. Around 80 per cent will be bought by council or housing association tenants, with the rest offered to people who have rented in Westminster for more than three years.

Properties will be chosen from areas where the highest proportion of council tenants have exercised their right to buy, and will be sold as tenants die or move away. The scheme, prepared by consultants Chapman Hendy, will run for a year from September and be reviewed in May.

A report to the bitter four-hour meeting on Wednesday night stated that the growth in home ownership would benefit the community by increasing participation in local affairs. Sales would help fund improvement s to other properties .

The previous designated sales policy was suspended in January following a preliminary report by the district auditor, John Magill, accusing councillors of using it to increase the Tory vote in marginal wards.

Mervyn Caplan, housing committee chairman, said it was a new arrangement from that condemned. 'Westminster has a home ownership of only 35 per cent which is half the national average.

Mr Caplan said the policy was supported by a survey of tenants and people in leased accommodation; about 50 per cent would prefer to own their home but were prevented by the high cost of housing. The sales would still allow the council to honour it statutory commitment to housing the homeless or people with medical needs. The borough has a 5,000-strong waiting list.