A report by an independent watchdog has called for a partial recount of the 2001 Census in central London after raising serious doubts about its accuracy.
The Census 2001 has come under fire
The Statistics Commission's investigation concluded census officials may have missed huge chunks of the population in Westminster.
An interim report called for the Office for National Statistics (ONS), which ran the £200m survey, to carry out a recount in 2006 in the "very hard to count" areas such as city centres and inner London, with transient populations.
The census infuriated urban councils such as Westminster, which saw its population fall by 25%, or 63,000 people.
Deputy leader of Westminster Council, Kit Malthouse, told BBC London the borough could lose £63m in grants as a result.
While the census put Westminster's population at 181,000, an independent MORI survey estimated 215,000, while council tax and electoral registers suggested 236,000, he added.
Other evidence suggested the ONS may have missed up to 25,000 homes, he said.
In addition, Kensington and Chelsea in west London, lost more than 30,000 people, Manchester more than 45,000, Middlesbrough 10,000 and Brighton 12,000.
Rural areas were affected as well - such as Forest Heath district council in Suffolk, which the census said had 55,000 residents compared with 71,000 a decade earlier.
Statistics Commission chairman Professor David Rhind said: "Evidence we have examined on the use of ... methodology in 2001 indicates that when the initial enumeration misses as much of the resident population as it did in Westminster, even sophisticated estimation techniques may not entirely compensate for the initial absence of reliable data."
ONS chief Len Cook said: "We want to make the best of what we will have then and we are publishing proposals today that present a way forward.
"Alongside this long-term strategy, I will be releasing shortly, plans for concluding the census matching studies we are doing with Manchester City and Westminster City, and the way we will provide population estimates of the reliability needed by people at local, regional and national level in the immediate decade to come."
The Statistics Commission is an independent watchdog set up in June 2000 to check and advise on the integrity of government statistics.