Cardiff has a population of 305,300, according to the 2001 Census

Research from the 2001 Census has shown that the population of the Cardiff is 305,300, but that is significantly below the city council's own estimate of 327,500.

The drop means the council could lose about �4m a year in government grants, because the money is based on the census figures.

People living in the city could have to make up that shortfall through a 5% rise in council tax bills.

An independent economic scrutiny committee is now overseeing research carried out by the council.

They are trying to prove that its estimate is more accurate that the census.

And the council could challenge the Office of National Statistics, which runs the official statistics operation carried out every 10 years, in order for the figures to be changed.

Census figures are extensively used in service planning, and have a direct impact on the council's finances Councillor Ralph Cook

Chair of the committee, Councillor Ralph Cook explained: "The council is running a research project to investigate the truth of this 22,000 people shortfall on the census.

"We are looking at other statistics like those from doctors' registers and the council tax register to prove that the council's figures are more accurate than those of the census.

"Grants that we get are based on the population and, according to the census, we are 22,000 people down.

"This means �4m less for the council to fund services. Over 10 years that is �40m that we will lose.

"If the figures on the census had been closer to those of the council, the council tax bill would be half of what it is now," he said.

As well as being used to calculate the budget settlement from the Welsh assembly, census figures are also used to predict future demand for housing and school places.

Westminster in London has also lost thousands of people

Cardiff is not the only city which seems to have lost some of its population.

In the London Borough of Westminster, figures were down by 60,000 people, and Manchester lost 45,000 people.

"Census figures are extensively used in service planning, and have a direct impact on the council's finances," said Mr Cook.

"It worries me when a set of figures which are supposed to be accurate appear to lose twice as many people as registered to vote in my ward of Trowbridge.

"The scrutiny of the 2001 Census figures is one of the most important reviews this committee has been involved in, as it affects everyone living in Cardiff."