The Rt Rev David Sheppard, Bishop of Liverpool, said there was no justification for attacking society's most vulnerable elements, as Tony Blair, favourite to assume the Labour leadership, condemned Mr Major for seeking to make political capital out of the issue.
Dr Sheppard, chairman of the Church of England's Board of Social Responsibility, told BBC Radio 4's Sunday programme: 'I find it a very unlovely feature of public life when people in power pick on the most despised groups in society rather than asking what the causes are.'
He claimed that much of the recent rise in begging was due to the decision in 1988 - when Mr Major was a minister in the social security department - to cut benefits to 16 and 17 year-olds who did not participate in government training schemes.
With the controversy heightened by a forthcoming report from the homeless charity Crisis - leaked to the Independent on Sunday - suggesting that one in four homeless people had served in the armed forces, ministers went out of their way to stress yesterday that the homeless and those begging were largely different groups.
But fears of a growing overlap between the two groups will increase in London with confirmation that three hostels with 33 beds in all are due to close in the next few weeks as part of the Government's policy of replacing temporary accommodation with one- bedroom homes.
Although the Department of the Environment insisted that the occupants of the hostels would not be driven on to the streets, hostel staff fear that alternative accommodation will not be ready.
Most of the new 3,500 flats intended for the homeless will not be ready until 1996. The row is also likely to be fuelled by current activity in Whitehall aimed at fulfilling the long-held objective of Peter Lilley, Secretary of State for Social Security, of curbing the increase in housing benefit - which has doubled to pounds 9bn in the last six years.
Mr Blair, speaking on BBC Radio 4's The World this Weekend, said: 'There is an element of those people out on the streets who are homeless and destitute for reasons that are tragic rather than reasons they have caused themselves.'
Saying that recent reports suggested 70 per cent of the homeless were physically or mentally ill, he added: 'The real criticism of what the Prime Minister has done is not only its vindictiveness against some who will be genuinely destitute, it is the notion that this is what we should be concentrating on. It is the pettiness and small- mindedness of it which will affront people and bewilder them when there are such massive problems to tackle, and when the Prime Minister appears oblivious to them.'
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