Westminster council has challenged the 2011 Census data, saying it has "serious concerns" about the figures released on Monday morning.
The Office for National statistics data shows Westminster has 10,211 residents per square kilometre, and 219,400 residents overall.
Cllr Melvyn Caplan, Cabinet Member for Finance and Customer Service said the census data about the area had previous been incorrect.
The information is used to calculate how government money is distributed around the UK.
“We have serious concerns about today’s Census figures, which at 219,400 represents a 9% reduction from the previous estimate in 2010," a statement from the council said.
“In 2001, the Census incorrectly counted the population of Westminster and reduced it by around 26%. This could have cost the council an estimated £50m in government funding over 10 years. We are really disappointed to be facing a similar situation.
“Westminster is probably the most difficult place to count in the country, with up to 30% of our population changing on an annual basis. It is exceptionally difficult for a ‘one size fits all’ survey like the Census to accurately count the population in areas like Westminster.
"We need to look at the figures more closely and ask the ONS to open up its process to us so we can figure out what has happened.”
Kensington and Chelsea also saw a 2.2% drop in its population, according to the data, from 162,000 to 159,000.