Frank Dobson, Labour's environment spokesman, said he had also written to the Health and Safety Executive to see if prosecutions should be brought.
New evidence last week showed how the council's former Tory leaders filled two blocks of flats in a solid Labour ward in Paddington with homeless families rather than move them to key marginal wards elsewhere in the borough.
Mr Dobson drew parallels with the long-running "homes for votes" inquiry, also involving Westminster. That inquiry, being conducted by John Magill, the district auditor, is focusing on the council's policy called "designated sales", where homes were sold cheaply to likely Tory voters. Mr Dobson said: "It is my view that before the asbestos scandal arose, Westminster had dragged London politics into the gutter - they have now got it down into the septic tank."
He told MPs in the Commons: "There is no excuse for anyone knowingly endangering the lives of other people's families. This is what they did. It has become clearer and clearer that this council knowingly moved homeless families into blocks known to be dangerously riddled with asbestos."
Mr Dobson also demanded the Government obtain a copy of a report being prepared for the current Westminster council by John Barratt, former chief executive of Cambridgeshire council, and make it available to Parliament.
Labour also went on the offensive on another aspect of Westminster, asking the Government to explain why it has vetoed the council being included in an official survey of local authorities' complaints procedures.