It was found that 24 asylum seekers claiming they were children after being sent to Liverpool were adults, according to the city council.
The agency said another 15 asylum seekers "needed to be identified as children by the government" and instead moved to London.
A spokesman for the Interior Ministry said that controversial cases remain "a very difficult area".
The City Council of Liverpool wants to reclaim 657,000 pounds for helping the children.
A council document said that 39 asylum seekers sent to Liverpool by the Home Office in 2018 "claimed at the time that they were children".
The agency "had to pay for each person's" age determination "(£ 1,500 each), which suggested that there were 15 children and 24 adults."
£ 647,000 a year
Support for children includes more benefits and educational opportunities that they can not access if they are looking for an asylum-seeking adult, according to the document.
"The 15 children should not have been sent to Liverpool by the Home Office," it said, "they should have been identified as children by the Home Office and therefore receive support from a local social service (as in Croydon) rather than a cost for Liverpool City Council ".
Since they were classed as children in Liverpool, the Council was obliged to support them – the cost of which was "about £ 657,000 per year".
It said it should "be able to reimburse the cost of the children who should never be sent to Liverpool."
The document also highlighted:
- For some of the asylum seekers who were considered adults, judicial reviews by legal advisers were threatened
- They were provided accommodation at a cost of "approximately £ 350,000 per year" to avoid legal costs
- It has decided to fund a lawyer to challenge the next six cases "in which the adolescent is judged to be an adult and faces a judicial review by the asylum seeker's legal adviser".
- The Council has asked the Ministry of the Interior to finance earlier independent age assessments
A spokesman for the Interior Ministry said "protecting children" was a priority, adding that "controversial cases" remain a very challenging area of work in which no single method of assessment or combination of techniques is likely to accurately determine an individual's age , "
"The Home Office treats someone who claims to be a child, as an adult, whose physical appearance and behavior strongly suggests that they are well over 18."
He added that funding for unaccompanied asylum seekers is under consideration.
"Threat of court"
David Simmonds, vice chairman of the Local Government Association, said the problem was spreading nationwide.
"The process at the border is pretty weak because there is no definitive way to check the age.
Lawyers know that a judicial review costs between £ 20,000 and £ 60,000 and uses the threat of a court to get what they want from their client.
"Fair play for Liverpool because he tried to defend himself, but win or lose, the taxpayer always loses."