Empty children's homes, school caretakers' houses and park-keepers' lodgings are to be used to shelter families in a bid to tackle Croydon's worsening homelessness crisis.

Family centres and retirement homes are also among the disused council buildings identified as potential solutions to a stark housing supply shortage in the borough amid soaring demand that is outstripping much of the country.

Croydon Council has been forced to consider alternative ways of housing residents after being unable to source sufficient supply from private landlords to cope with growth in demand.

It expects to create 24 temporary flats by redeveloping three children's homes and a family centre and also plans to bring 42 empty homes back into use.

The council had to find homes for 847 people in 2012, more than double the year before, and has forecast an 18 per cent rise in demand over the next 12 months.

It means the number Croydon families living in temporary accommodation rose by 30 per cent last year, compared to a five per cent rise for the rest of London and seven per cent nationally.

The situation is likely to worsen when the borough becomes a guinea pig for central government's new cap on household benefits in April.

But council bosses denied shortchanging Croydon residents after talks with government ministers ended with them placated over the borough's test case role, which will leave 800 households worse off.

The cap will limit weekly household benefits income to £500 for parents and couples and £350 for single adults with no children.

Mike Fisher, council leader, and Dudley Mead, cabinet member for housing, met with secretary of state for work and pensions Iain Duncan Smith this week to express concerns over the impact the limit will have.

But after the meeting Mr Mead claimed he was convinced Croydon would gain from implementing the scheme first.

He insisisted: "I did not sell Croydon short. We are far better off working with government. We have the opportunity to influence the way the cap works."

But Tony Newman, the council's Labour group leader, said: "Ministers will scrap the cap when they realise it doesn't work, meaning we have to deal with its disastrous consequences while other councils will never see the light of this crazy scheme."