Croydon is to share in a £1.9m Government cashpot to help it "raise its game" in dealing with homeless families.
The council is to receive a £265,166 grant from the Department for Communities and Local Government (DCLG) to drive down the number of families unlawfully left in bed and breakfast (B&B) accommodation.
The department says Croydon is one of 15 local authorities which together account for 80 per cent of all families in the UK left in temporary housing B&B housing for more than the legal limit of six weeks.
Six more of the 15 councils - including Crawley, Barking and Dagenham, and Hounslow - will also receive a share of the £1.9m.
Croydon Council plans to spend the money on an "innovative programme" to provide earlier support for families.
The council will receive half the cash up front and the other half as reward for success, although it insisted it no longer had families in shared B&B accommodation longer than allowed.
A council spokesman said: "The council does not have any households in shared bed and breakfast accommodation longer than six weeks.
"We will use this funding to launch an innovative programme that will support families at an early stage, to help them find suitable housing, work, childcare and receive advice on managing debt and budgeting.
"The aim of this is to significantly reduce the number of people requiring bed and breakfast accommodation."
The DCLG said the grants were intended to encourage families to "raise their game and discover innovative new ways to help meet the housing needs of these most vulnerable of families".
Communities minister Don Foster said: "Today’s £1.9 million funding will help to get families across the country out of Bed and Breakfast accommodation and into stable homes.
"But this isn’t just a short term fix about cutting numbers - I want these councils to find long-term solutions to homelessness in their areas.
"They have a legal duty to help these families, and with this funding I expect them to ensure that no family need ever be stuck in this unsuitable accommodation for weeks on end."