The British government faced new attacks over immigration on Thursday after local councils demanded more money to pay for services for thousands of migrant workers missed in official counts.

The Local Government Association (LGA), representing more than 400 local councils, called for a 250 million pound ($520 million) a year contingency fund to help areas facing high rates of migration.

Saying official statistics significantly underestimated the number of migrants in many areas, the association called for a fresh approach to calculating numbers.

The report fuelled an uproar over immigration which broke out this week when the government admitted it had underestimated the number of foreign nationals who had come to work in Britain in the last decade by 300,000 -- the size of a medium-size city such as Coventry. The new estimate is 1.1 million.

"I think the whole shambles over immigration this week just shows why we need a new government. It's not that they've got no vision. It's just that they are also completely incompetent," opposition Conservative leader David Cameron told the BBC.

He repeated his call for a limit on migration to Britain from outside the EU. "I'd like to see the overall level of net immigration into the UK be substantially lower than the roughly 200,000 a year we see today," he said.

Hundreds of thousands of immigrants have come to Britain in the last few years, many from east European countries that recently joined the European Union. The LGA said this had put a strain on public services in parts of Britain, affecting housing, health, education and translation services.

Central government gives city councils part of the money to pay for services based on population estimates for the area.


ESTIMATES TOO LOW

The LGA says these estimates are too low because many migrants are missed from official counts, leaving councils without the money to pay for key services.

"No-one has a real grasp of where or for how long migrants are settling so much needed funding for local services isn't getting to the right places," said LGA Chairman Simon Milton.

Communities Secretary Hazel Blears said she had recently announced an extra 50 million pounds for local authorities and they would be getting more money in coming years.

"I think the best thing to do is for us to sit down with each council (and) talk through with them what the priorities of their area are," she told BBC News 24.

Britain's main political parties agree immigration has boosted Britain's economy, which has grown steadily throughout the Labour government's decade in power. Wage competition has kept down inflation and interest rates, policymakers say.

But some critics complain that migration has undercut British-born workers and strained public services.

Government figures show more than half the jobs created since 1997 had gone to workers born outside Britain but said there were still 660,000 job vacancies.

The government said on Tuesday it would prolong curbs on Bulgarians and Romanians looking for jobs in the country, in response to concerns over the pressure on public services.