Seven Whitehall departments were in a standoff with the Treasury over how a £1.57 billion social housing programme announced by Gordon Brown will be funded.

A string of ministries disputed figures in a revised breakdown given to The Times by the Treasury of amounts that departments would be contributing to the policy. One Whitehall official said: “I have never known an announcement like this where money is so off the wall.”

The Treasury said that five departments — Health, Education, the Home Office, Transport and Energy and Climate Change — would find £810 million from capital underspends while two — Business, Enterprise & Skills, and Communities — would find the remaining cash by “reprioritising”.

Roughly £670 million has to be raised this year for the homes, the centrepiece of Mr Brown’s draft legislative programme announced on Monday, and £900 million next financial year. An extra £150 million has to be found for low-carbon projects, the Treasury admitted.

But the Home Office categorically denied that it would be providing £90 million — the new Treasury figure — having been told that it would have to find less than £50 million. “As far as we are concerned we are finding less than half that amount,” a Home Office source said.

The Communities Department also suggested that it had still not agreed the final sum it was providing for 30,000 new homes, which the Treasury said was £690 million — slightly less than half the amount needed for the project.

Sources at the department indicated that no decisions had been made about how the money would be found but continued to dismiss a suggestion, floated by both Downing Street and the Treasury, that much of the money would come from its Decent Homes programme, a Labour manifesto commitment to refurbish all four million council homes.

A Department of Health source admitted that there was “total confusion” in Whitehall after the Treasury claimed that the department was footing about £240 million of the housing bill — a figure that was not recognised at the ministry. A spokesman said that no specific area of underspending had been identified.

The Treasury’s figures show that the Schools Department is providing £200 million, which is supposed to come from underspending on the Building Schools for the Future project. This is already more than £10 billion over budget.

About £350 million is to be raised at the Department for Transport by using an emergency fund set aside in case a PFI project to widen the M25 needed money. The motorway is £1.5 billion over budget.

Austin Mitchell, the Labour MP, who chairs the all-party group on council housing, led warnings that the project to refurbish all council and social housing should not fall victim to the raid on Whitehall to build new homes. He said: “We are cutting off our nose to spite our face.”

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