Elderly tenants in Winchester are facing "real hardship" under a major shake-up of rent levels, according to both the city's MP and its housing chief.

The Government is forcing councils to charge rents based on local incomes and house prices. The plan is to reform rents for council and housing association tenants, so all social rents are based on the same footing. But it means rents are going up in expensive areas, such as Winchester.

Among the hardest hit are elderly people on low incomes in sheltered housing who don't qualify for housing benefit which pays the rent.

Winchester MP, Mark Oaten, said he had spoken to some "very upset and tearful" housing association tenants who faced rent hikes of 10-20% this year. They are finding it crippling, especially on top of increases in council tax which wipe out any increase in pensions.

"It can't be right that they should face such a steep rise at a time when their pension has not seen the same increase."

Mr Oaten raised the issue in the Commons this week, tabling questions to Deputy PM, John Prescott and sponsored a parliamentary motion calling on the Government to review the impact of the rent re-structuring plan.

Councillor Dominic Hiscock, cabinet portfolio holder for housing, added: "Tenants have repeatedly raised concerns about the effect rent re-structuring has on people of modest incomes.

"When rent rises outstrip pension increases, it becomes a struggle to keep a roof over their head. It's causing real hardship."

The Government wants to ease rent rises by insisting council rents go up by no more than £2 a week, depending on the rate of inflation. But this means tenants still have to find an extra £96 a year.

Cyril Gilbert-Wood, chairman of TACT, a Winchester council tenants organisation, said people were worried because rents were based on valuations carried out in 1999. Since then, prices have rocketed and the plan is due for review.

Mr Gilbert-Wood said: "For very poor pensioners it is not a great issue, as they get housing benefit.

"The real problem is is for people who have modest savings or small industrial pensions which remove them from the threshold for housing benefit. They are the ones who are hit."