Hundreds of thousands of council homes have been branded unfit to live in.
Nearly one in five have been classed "non-decent". In total 714,000 were cold, draughty, leaky or lacking "reasonably modern facilities".
The Government says this is down on the 2.1 million in need of work when they came to power.
But critics blasted the figure and said it could rise again because of cuts in council budgets.
The Lib Dems claim £150million is being cut from the Decent Homes Programme and £75million from the Private Sector Renewal Scheme. Sarah Teather, their housing spokesman, said: "Labour has abandoned the people who need most help.
"It is simply unacceptable that hundreds of thousands must live in run-down, crowded, cold and draughty housing."
Advertisement - article continues below »
Worst hit is the North East with 26% of homes below par. Best is the South East with 12%. Paul Bettison, of the Local Government Associa-tionsaid: "It is deeply worrying that funding should be withdrawn.
"It condemns thousands to continue living in poor housing.
"Improvements have been a long-standing Government promise that must be seen through."
Meanwhile tenants in buy-to-let property are to get new rights to protect them from instant eviction if their homes are repossessed from hard-up landlords. Housing minister John Healey says they will get two months' warning before a notice to quit is issued. At present tenants can be out on the street in a matter of days through no fault of their own.
Mr Healey said: "This will give much-needed breathing space. But I also want to see more lenders use alternatives to repossession."