An extra 17,500 people have been "found" in central London after a review of census figures for 2001.
The revised figures for Westminster are the biggest increase
It is a 9.6% rise on previous estimates for Westminster City Council, the biggest increase in the review of figures from England and Wales.
The council said the shortfall could have theoretically lost it up to £50m in grants were it not for safeguards on changes to local government funding.
Deputy leader Kit Malthouse said it vindicated Westminster's complaints.
The council commissioned its own MORI poll to estimate Westminster's population.
Mr Malthouse said they had spent £250,000 trying to prove its population stood at between 215,000 and 225,000.
He told BBC News Online: "We have got to remember this is a 2001 figure.
'Massive moral victory'
"When you add inflation and other adjustments, we think it will give us an extra 30,000 other people.
"From our point of view it is a victory on the numbers but it is a massive moral victory as well."
He said Westminster's "mobile" and ethnically-diverse population made it difficult to pin down its exact numbers.
But the Office of National Statistics (ONS) had ignored the council's warnings, he said.
Across England and Wales, 60,000 people have been added to the estimated population in a review published on Thursday.
John Pullinger, the ONS executive director responsible for the 2001 Census, said the analysis had given them "further insight" into specific problems estimating the population in certain parts of England and Wales.
"This knowledge will be taken forward and fed into the planning and development of the 2011 Census," he said.
"These studies reinforce earlier findings that the 2001 Census did very well to measure the population in all but the most exceptional circumstances."