WELFARE fraud and overpayment blunders are wasting Pounds 180 million a year in London alone.

In the South-East region outside the capital, another Pounds 120 million is being lost through official error or cheating.

The figures, from the Office of National Statistics, were condemned today by the Conservatives who said the money could have been used to hire thousands of nurses, policemen or teachers in the capital. A third of the London overpayments - Pounds 60 million - were down to fraud and nearly half were due to official error. Mistakes by claimants accounted for under a quarter of the problem.

Shadow welfare reform minister David Ruffley said: "London is topping the national league table for benefits overpayment. These scandalous overpayments in the capital alone are the equivalent of 6,800 nurses, 2,200 doctors, 5,600 teachers, 5,000 policemen or 29,000 hip operations."

He added: "They tried to slip these figures out last night under cover of the pensions review because they are so embarrassing."