A homeless tent city has sprung up outside Australia's central bank in the heart of Sydney, sparking a war of words over who should deal with it.

More than 50 people are camping in the city's Martin Place, home to high-end office buildings and glitzy stores. While some have accepted offers of help and accommodation elsewhere, others have arrived to take their place.

Sydney Lord Mayor Clover Moore blamed the swelling numbers on "decades of gutless inaction" on homelessness from successive New South Wales state governments.

The city council, she said, had no power to remove them, and called on the state government to provide more affordable housing.

"It's not illegal for people to be homeless -- for some people it's an inevitable consequence of the housing affordability crisis in Sydney," Moore said in a statement this week.

"We have the power to move structures and make places safe. But we don't have the power to move people on. The police have the power to do that. We're not calling on the police to do that. But that's the reality."

NSW Premier Gladys Berejiklian insisted it was up to the City of Sydney to find a solution, saying government officials had been to the site dozens of times but many people refused to leave.

"It concerns me that people who are sleeping in tents in Martin Place are refusing to get help, refusing to receive help, and I frankly think it's unacceptable," she said.

"Our staff have been down there 41 times... and I call on Clover Moore to get rid of that tent city. It should not be there."

More than 400 people regularly sleep rough in central Sydney. While homelessness is a complex problem, experts have warned growing numbers of people are failing to benefit from the nation's stellar economy.

An unprecedented economic expansion -- fuelled by a massive mining investment boom -- has boosted house prices and lined the pockets of many citizens.

But it has also led to the country's biggest cities, Sydney and Melbourne, being ranked second and 10th on a list of the world's least affordable housing, putting further pressure on those already struggling.

-- This story accompanies photos by Peter Parks --

Source: AFP