A £1.5m overspend on asylum seekers in Oxfordshire has been cut by more than half after a Home Office rethink.

The county council looked as if it would have to pay a heavy price after the Government rejected its initial application for extra funding.

A series of elementary form-filling mistakes and failure to keep proper records of the 1,300 asylum seekers housed in the county was blamed.

A second application has been more successful, with the Home Office finally agreeing to provide the county council with extra money to house asylum seekers because of the high cost of accommodation in Oxfordshire.

From this month, the county council can claim £50 extra per asylum seeker family in its care - meaning it can claim the maximum of £350 per week per family.

Slough in Berkshire is the only other area outside London that can claim the cash 'top-up' to meet the high cost of housing in the south east.

The Home Office decision means that the county council is left with a £650,000 overspend on asylum seekers, instead of £1.5m.

The Home Office's decision to give out the extra cash is backed in a report published by the Audit Commission.

The report states the amount of compensation given to local authorities should reflect regional variations in the cost of living.