The government pocketed a record �2.7bn in stamp duty from homebuyers last year, official figures have revealed.

Stamp duty revenue

1996-7: �0.67bn 1997-8: �0.83bn 1998-9: �1.06bn 1999-00: �1.8bn 2000-01: �2.15bn 2001-02: �2.7bn

More than half of the tax was paid by homeowners in the London and south east of England, the Inland Revenue said.

People buying properties in these areas handed over more than �1.5bn to the Treasury.

The government has increased stamp duty four times since it took office in 1997.

Stamp duty hikes

In the year before Labour came into power, revenue from stamp duty on residential property purchases was only �675m, with �315m generated from sales in the South East.

Increasing stamp duty, which must be paid on the purchase of homes worth more than �60,000, has been one of Labour's most controversial taxes.

There has been a 400% increase in the top rate since 1997.

Duty on a house worth more than �500,000 is now 4%, compared with 1% before May 1997.

The Council of Mortgage Lenders has been one critic of the government's stamp duty policy.

Earlier this year it accused the government of penalising first-time buyers by failing to raise stamp duty thresholds in line with the high house price rises.

Stamp duty rates

�60,000-250,000: 1% �250,000-500,000: 3% Above �500,000: 4%

But the government's stamp duty bonanza may be poised to end as the housing market cools, some observers said.

Chas Roy-Chowdhury of the Association of Chartered Certified Accountants (ACCA), said: "It's been a cash-cow for the government. But indications are that the house prices are about to hit a brick wall.

"It will be interesting to see how the chancellor makes up the shortfall once there's a slowdown in the market, particularly with greater pressure on public finances following the stock market downturn."