“You can’t house people in places that don’t exist,” Cllr Phil Waker told the Post, as his department outlined plans that could see families on the waiting list moved as far afield as areas south of the Midlands.

The town hall’s housing chiefs have spoken out as government plans to introduce a benefits cap of £500 a week per household creep closer.

They argue the cap, and other government changes to housing provision, will exacerbate a problem that all London boroughs are facing and force them to take extreme measures to fulfil their duty of offering residents in need a home.

The mixture of soaring private rents, along with the fact that more people than ever are in the private rental market, the lack of social housing and the changes to welfare provision all make for a toxic mix, said the council.

Housing strategy chief, Ken Jones, warned: “We are facing perfect storm conditions in terms of housing and homelessness. The private rented housing sector has more than doubled in the last five years from 7 per cent of homes in the borough being privately rented to more than 15 per cent.

“Demand for privately rented homes is increasing and that’s meant we now have a bed and breakfast crisis as well. Before the last general election we had no-one in bed and breakfast. Today there are 145 families.

“The changes to welfare reform will mean even Barking and Dagenham rents – the lowest in London – are going to be unaffordable to many. We are almost certainly going to be placing families out of London.”

“A whole range of locations” are being looked at and over the coming years families could find themselves offered properties more than 50 miles away.

Each family’s individual circumstances would be looked at before a decision on their case is made, the council insisted, including children’s schooling, family commitments and health needs.

Older residents may be pleased to move and the Greater London Authority’s seaside and country home scheme – which moves willing pensioners to outer-city locations – has proved popular. Critics have pointed out that empty homes should be freed up but the council said this would go nowhere near filling the void.

There are just less than 300 private homes in the borough that have been empty for more than six months out of a total housing stock of 71,000 properties.

Temporary accommodation is also a worsening problem. There are around 1,200 households in temporary housing and more than half of those are in privately rented digs – many of which are unsuitable for the size of their family.

To tackle this issue, the council is considering setting up deals with holiday camp firms to offer accommodation in the quiet seasons.

Cllr Waker said: “We are looking at all options. If our homelessness pressures - which are already severe - grow, so the crisis becomes bigger, there’s no solution that isn’t on the table.”

The government’s changes will also affect those under-occupying their social housing property.

Housing benefit claimants under-occupying by one bedroom will lose around £15 a week, going up to around £22 if it’s two bedrooms.

“We think there’s something like 450 people that could be affected by it,” Cllr Waker explained. “If you’re hard pressed, £15 a week is a lot. Do you give up the home you’ve lived in for years or do you take that financial hit?”

But the Department for Work and Pensions argued that across the country nearly a third of working-age social housing tenants on Housing Benefit are living in accommodation too big for their needs and this is contributing to overcrowding.

But the government has fiercely defended its welfare policy, due to come in during the summer, arguing it will bring “fairness” to the system and “make work pay”.

Even with the reforms, Housing Benefit will meet rents of up to £21,000 a year, the department added.

A spokesman said: “It’s not right that benefit claimants live in homes that working families can’t afford, or that people are better off on benefits than they are in work.”