The Child Poverty Action Group has applied for a judicial review against caps to housing benefit, just one month before they are due to take effect.
The charity says the cuts, which limit the amount paid per bedroom and the size of property to a maximum of four bedrooms, will immediately force thousands of families out of London.
It estimates that 20,000 children will be among those affected.
Alison Garnham, chief executive of CPAG, said: “Housing benefit will no longer be the national scheme it is legally meant to be once cuts redesign it as an engine of social segregation.
“It is not right that families living in certain areas, especially larger families, are punished and pushed aside while parts of Britain become enclaves for the privileged.”
The bedroom limits will affect new housing benefit claimants from April, with existing claimants seeing their payments cut nine months later.
The cuts will affect private landlords with housing benefit tenants, whose Local Housing Allowance will be reduced.
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