The cash will be spent on the bed blocking crisis

The Labour MP for Monmouth, Huw Edwards, has written to Gordon Brown to alert him to the decision to spend much of the money on social services.

Mr Brown announced the money would be given to local authorities in Wales in his pre-Budget report.

The UK Government expected the money to be used to limit council tax rises.

But on Tuesday it was revealed that the cash will now be spent on solving the bed blocking crisis.

Several MPs raised the issue with the Welsh Secretary Peter Hain during a private meeting at Westminster on Tuesday night.

I think people out there, across families in Wales, who are really dealing with this difficult problem, will be very pleased Sue Essex

And Mr Edwards has written to the Chancellor asking him to investigate.

He said he was "staggered" by the assembly's actions.

"Nobody is denying that there is a need for more money in social care services but the chancellor couldn't have had that in mind at the time, and I'm asking him if he's satisfied the money is being allocated in the way he intended."

Mr Edwards said there was a lot of disquiet among Welsh MPs over the issue.

"Many of us are committed devolutionists but I don't think devolution is working in this case.

"I have a higher regard for the assembly than many of my colleagues but this policy has been implemented wrongly."

The Treasury says it is up to the assembly to decide what to do with the money.

The assembly insists the money is going where it is most needed

And the assembly government insists the money is going where it is most needed.

Finance Minister Sue Essex explained she was handing the money out directly to councils to be used specifically to pay for housing and more home care places for elderly people.

That way they can leave hospital more quickly as they will be cared for in their homes and free up beds for patients who need medical treatment.

She says the decision was made to tackle a key concern for people in Wales - to make sure people could be looked after in their own homes - one of the biggest challenges currently facing Wales.

"I think people out there, across families in Wales, who are really dealing with this difficult problem, will be very pleased."

But Russell Goodway, the Mayor of Cardiff and the Welsh Local Government Association's Finance spokesman, said it was a decision but that had been "very ill thought through."

"The Chancellors intention to cushion increases in council tax cannot now be delivered," he said.

"The problem is the money is a one off grant.

"If we increase the spending on social care for one year it means in a year's time we have to cut it back again and this isn't a sustainable position.