Southwark's ruling Labour group has denied accusations from the Liberal Democrats that it is using Borough, Bankside and Bermondsey as a "cash cow" to fund schemes in Camberwell and Peckham.
Introducing a debate on mixed communities and affordable housing at last week's council assembly meeting, Southwark Lib Dem leader Anood Al-Samerai warned that people are being priced out of their neighbourhoods.
"People have a right to afford to live in the borough where they grew up," she told councillors.
"I think people have a right to afford to live in the area where their children go to school. I think they have a right to afford to live near to where they work.
"I know that there are different answers to this question. For example, I know that the Tory answer would be that if they can't afford it, they shouldn't live there.
"What I'm disgusted about is that that seems to be the Labour answer as well."
Of the Labour-run council she said: "They don't understand the north of this borough. They think it's all full of rich places like Shad Thames.
"They think that the people who live in the north of the borough only want to live there because of riverside views.
"They don't realise that there are generations of families there who live by the river because they were dockers and this is the community they grew up in.
"They seem to think it's acceptable that we end up with a situation where there isn't social housing in the north."
Cllr Al-Samerai said that the stock of council homes in areas like Borough, Bankside and Bermondsey is being "chipped away" by the policy to sell any home that becomes vacant that is valued at more than £300,000.
"We all saw that Reverdy Road programme; there was a really sad bit at the end where a family home in the heart of Bermondsey was auctioned off. The reason that happened was because of the Labour administration's policy."
She went on to contrast Southwark Labour's failure to secure any on-site affordable housing in major developments in SE1 with the different approach adopted in the Waterloo area by neighbouring Lambeth.
"In Lambeth – in Bishop's ward – they are still able to get social housing," said Cllr Al-Samerai. "Perhaps the Labour leader here could ask his colleagues over there."
She concluded: "I can't afford to live in the borough I grew up in. My sister can't afford to live in the borough she grew up in.
"Every advice surgery I do, I meet people who can't afford to live in the borough they grew up in. Mixed communities are possible in Southwark, they're right and they are actually worth fighting for."
Labour leader Peter John replied: "This administration is investing £326 million between now and 2016 making every council home warm, dry and safe. That is the largest programme that any council has of investment in its stock. I'm proud of that fact.
"I'm also proud of the fact that we have committed to building 1,000 new council homes because we recognise that council housing, for many people, is the only possible housing that they can afford to live in.
"That is more council housing than any other authority in this country has committed to building.
"What I don't understand is why the Lib Dems say that both of those things are somehow bad.
"In order to fund that £326 million programme, yes, it is necessary to sell some stock which is very expensive to bring up to proper condition."
Chaucer ward Labour councillor Claire Hickson accused Liberal Democrats of saying one thing locally and doing another thing nationally.
"I can't believe that members opposite have got the nerve to say those things when we consider what their national policy is that they are pushing through Parliament at the moment," she said.
"Their national policy is to allow developers to bypass local government and have zero per cent affordable housing in new developments.
"Nick Clegg announced it alongside David Cameron; it's not a Tory policy it's a joint Lib Dem – Tory policy."
She added: "If you get this through we will not be able to negotiate with developers; we will have no chance of negotiating with developers."
Southwark Lib Dem deputy leader Paul Noblet noted that the cash secured by the council from private developers in SE1 "does seem to be disappearing in large swathes south of Elephant & Castle, particularly I note into Nunhead and South Camberwell wards".
These wards are represented by the cabinet member for regeneration Fiona Colley and the council leader Peter John.
Labour councillor Nick Dolezal, who chairs Southwark's planning committee, accused Lib Dem members of failing to look at the borough as a whole.
"We are responsible for the whole of Southwark, not just the north," he said.
"We have to look at how we use the resources that are available to us to deliver the services that we should be delivering to all the people who live here, particularly the most vulnerable."
He added: "We have to look across the borough to be able to invest in social housing, affordable rented housing and housing that people can aspire to own. That's a whole approach – it's not just looking at one little section of the borough."
Cllr Dolezal denied that the Labour administration treated North Southwark as a "cash cow".
"The north is predominantly social housing," he said. "It's just under 60 per cent social housing.
"There is social housing cheek by jowl with Neo Bankside. There's a massive estate there. Then there's Tooley Street and then there's all the social housing that drifts all the way back to the Elephant & Castle and then into Peckham.
"So it's not a cash cow. There are two or three sites that generate the sort of money we are talking about to invest in social housing across the borough."
He said to the Lib Dems: "It is a judgement we make based on the values we hold, unlike the values you hold. We do look towards meeting the needs of all, not just a few."
Cllr Ian Wingfield, the deputy council leader and cabinet member for housing, added: "We don't discriminate where people live; we're investing the length and breadth of this borough in every single council ward.
"We're delivering and your Government is aggravating the situation even more through its housing policies: getting housing associations to charge up to 80 per cent of market rents, cutting welfare benefit entitlements, their bedroom tax and universal credit."
Southwark Conservative leader Lewis Robinson criticised Labour and the Lib Dems for playing politics with housing.
"The council ain't going to fix Southwark's housing problems on its own, and neither are any of the other providers on their own," he said.
"I just think we need to take a step back from the politics and have an informed and honest debate with our tenants and leaseholders about the future of housing in this borough."