By Geoff Andrews, Local Government Correspondent

At least five rate-capped London Labour boroughs are still in trouble with their budgets, halfway through the financial year.

Their problems will loom large at a meeting in London today of 16 rate-capped Labour authorities, to plan strategies because of the ever-shrinking opportunities for creative accounting.

Brent has a technical gap of £24 million, although slippage in spending on. a variety of projects will see this reduced to about £7 million. To combat the problem, the council is considering introducing a partial freeze on appointments (including that of a " nuclear-free zone" officer), together with rent rises for its 20,000 tenants, and cuts in discretionary education grants.

Camden, badly hit by the homelessness crisis, has been forced to keep its homeless persons' unit closed since April, but is still having to put up an extra 30 new households a week in bed and breakfast hotels. Nearly 1,500 families in Camden are housed in hotels, at a cost to the council of £20 million a year, 25 times more than four years ago, and far more than is spent on housing repairs. Criteria for accepting people as homeless have already been tightened.

Haringey has organised with friendly councils who are not rate-capped what are known as interest rate swaps, to get round their financial problems, but, in recent weeks, doubt has been cast on the legality of some of these arrangements.

Rent rises of up to £3 a week are being discussed in Hackney, after a five-year freeze, to cope with cuts of up to £9 million.

*An action group yesterday renewed its legal challenge against a 62 per cent rate rise, imposed by a Labour-controlled council.

The 20,000-strong Waltham Forest Ratepayers' Group claimed in the Court of Appeal that a High Court ruling on July 29 in favour of Waltham Forest Council, in east London, had been wrong in law.

Mr James Wadsworth, QC, for the action group, argued yesterday that the two High Court judges had been wrong in holding that it was legal for individual Labour councillors opposed to the rate increase to vote for it in the interests of party unity.