The government underestimated migrant worker figures
An inquiry into the "widespread perception" that immigrants are jumping housing queues is to be launched by the Equalities and Human Rights Commission.
Its head, Trevor Phillips, said the belief migrants were gaining "unfair advantages" was fuelling tensions.
And the question of "whether the housing system is being abused to the detriment of anyone - including white families" had to be finally settled.
It comes as councils call for an extra £250m a year to cope with migrants.
Mr Phillips backed the Local Government Association's call for a £250m-a-year fund to help regions struggling to cope with unexpected influxes of migrants.
In a speech in Birmingham, Mr Phillips said people were "realistic" about migration and accepted they had to share services such as schools and hospitals with new arrivals.
But he added: "What, however, does drive tension and hostility is a widespread public perception, that new migrants too often get an unfair advantages to which they are not entitled.
"And one area where this idea of unfairness is most frequently alleged - is in housing allocation.
"Specifically that white families are cheated out of their right to social housing by newly arrived migrants."
He said there was "no reliable evidence to back up this claim" and public feeling was "driven by careless media and racist parties".
But he said it was not enough to "merely to dismiss the suggestion" and hard facts were needed.
He proposed to set up, with the LGA, "the best independent study we can by dispassionate academics on whether the housing system is being abused to the detriment of anyone - including white families.
"If there is evidence that it is, then we have the powers and the mandate to stop the abuse and we will do so."
But if there was no evidence it could be neutralised as a political issue, he added.
Earlier, the LGA called for extra cash for areas most affected by rapid population changes.
It surveyed more than 100 councils and public bodies and found most reported pressure on services - with extra costs being met "at the expense of mainstream budgets".
The report highlights seven "key issues" for public services, including the impact on schools, child protection services, language barriers, housing, community relations, crime - often against migrants - and health.
Other findings include:
- Many schools have difficulty coping with frequently changing populations from a wide range of cultural backgrounds
- Children of some migrant workers are working longer hours than permitted by law
- There are too few English language classes
- Many migrants go to hospital A&E for treatment rather than registering with a doctor, because they do not understand how healthcare operates in Britain
- Many migrants are living in homes which are in a poor state of repair - and sometimes a fire risk
- The numbers of migrants claiming homelessness help or being rehoused is increasing in some areas
The LGA concerns come in the wake of a report by the Home Office's Migration Impacts Forum, which said nearly every region in the UK had difficulties in housing, health, education and crime - due to increased migration.
Some councils complained that official statistics on population - used to calculate their funding - underestimate the number of migrants they are receiving.
Slough Borough Council believes it will be short-changed by up to £15m in government grants up to 2011. Westminster City Council says it will lose out by £12m.
The LGA also called for an overhaul of "inadequate" migration statistics.
It wants National Insurance numbers, GP registrations and schools census data used to help track population changes.
Conservative leader David Cameron said there should be a limit on immigration as people were concerned about the pressure on health and education services when the population increases.
The Liberal Democrats said it was impossible for councils to cope with rapid changes in population.
Communities Secretary Hazel Blears said she recognised that migration could put a strain on public services and that "some individual local authorities are experiencing more challenges than others."
She added that the government had allocated more resources over three years to support councils, which amounted to £960m in the first year alone.
"On top of that we have also announced £50m to help local communities manage cohesion and promote integration," she said.