Nick Clegg has blamed local councils for any misery caused by the ‘bedroom tax’ – as he vowed to face down Liberal Democrat activists demanding a U-turn.

In an interview with the T&A, the deputy prime minister accused town halls of failing to spend – or even returning – Government cash meant to help people in trouble.

But the claim was rebuffed by Bradford Council, which insisted it had not returned any money and expected to spend its entire pot. A spokesman said it had already spent £352,000 of the £1.18 million it has been allocated in ‘discretionary housing payments’, in just a few months.

Asked if any money had been returned, he added: “No and we do not expect to. Our projections indicate we will spend the fund.”

Mr Clegg said he would defy growing calls to halt housing benefit cuts for tenants willing to ‘downsize’ but unable to move because no smaller home is available.

That was the central demand in a motion passed overwhelmingly by this week’s Lib Dem conference, when the party faithful condemned the policy as “reprehensible and evil”.

But Mr Clegg insisted such a U-turn was unnecessary because town halls had been given enough cash – £150 million in total – to help those facing benefit cuts.

On halting cuts for people unable to move, he said: “We can’t take that step until we know why councils – which have been given millions and millions of pounds to help exactly those people – don’t seem to have used it.

“What we are finding is that how that money is being used by councils varies wildly across the country. We need to understand why councils haven’t used the money we have given to them to do exactly what the motion called for.”

Mr Clegg pointed out that “several million pounds” of discretionary housing payments were returned by local councils at the end of the last financial year. However, that was before the bedroom tax – a policy designed to save £500 million and free up larger homes for families in cramped properties – was introduced last April.

The move has penalised social housing tenants with spare rooms, cutting housing benefit by 14 per cent for an extra bedroom and 25 per cent where there are two.

Today, the National Housing Federation will publish fresh research suggesting 51 per cent of residents hit by the bedroom tax were unable to pay their rent between April and June.

David Orr, its chief executive, said: “This is the most damning evidence yet to show that the bedroom tax is pushing thousands of families into a spiralling cycle of debt.”