High-level talks were launched today (Monday) to raise Southend's population by at least 10,000 who were missed from the 2001 census.
The error is believed to have cost Southend Council at least £5million in Government funding which has contributed to severe budget cuts next year.
Senior councillors were meeting Whitehall officials from the Office of National Statistics with evidence of 178,000 people living in the borough compared with 160,000 in the census.
In one case, investigators discovered that 14 people were living at a single Westcliff address. The property was listed in the 2001 Census at rather smaller number - just one.
Council leader Howard Briggs said: "If we have to move forward without an improvement in the census situation, the prospects for Southend are pretty horrific, and I mean that. I give warning now."
The 2001 Census findings are challenged by Southend's GP surgery lists, which indicate a population of 168,000.
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