Tenants who moved were given up to £20,000 in a scheme which should have left their houses free for the homeless. But often the homes were sold to Conservative voters, claims the paper.
Shadow environment secretary, Jack Straw, said the affair may now require an investigation by the Public Accounts Committee.
This 'second' scheme. claims the paper, was made possible by money under the Cash Incentive Scheme, a programme in which tenants could be given up to £13,000 towards buying a new home provided they left their council property. Those freed should have been used exclusively to house the homeless.