"We are proactive on this issue and there are a variety of other funding pots that we do access for building new homes, including affordable homes."

The row follows the Government's new-found enthusiasm for allowing town halls to build council homes, after a 20-year drought.

In September, Warrington and West Lancashire were among 47 local authorities whose bids for funding were accepted, when they were handed a £2.75m cash injection.

During local government questions yesterday, Mr Kilfoyle said: "Despite the long waiting lists for housing in Liverpool, the city council – which holds no housing stock itself – has made no application?

"It has, however, recently managed to appoint a new assistant executive director of housing at a salary of £102,000 a year, plus a 10% bonus."

In reality, the investment will be very small scale – just 30 homes in Warrington (£1.95m) and only 17 in Skelmersdale, West Lancashire (£807,500).

That is a drop in the ocean next to the growing housing crisis in the region.

A total of 12,866 families – one in every 15 households – are waiting for a home in Liverpool alone.