Mr Howard will stay at Blair House the night before he receives the US Medal of Freedom from retiring President George W Bush next week.

Mr Obama has been forced onto the Blair House waiting list until January 15 when he and his family will move in, five days before his inauguration as president.

The Obamas requested an early move-in at the 70,000-square-foot, 119-room mansion across the street from the White House, so their children could settle in to start school this week, The Washington Post reported.

But the incoming first family was told the residence had been booked out, so they took a suite at the nearby Hay-Adams Hotel.

President Bush has been the main target for criticism from bloggers to political sites.

"George couldn't make this idiot stay at the Hay-Adams?" was one of 142 comments to The Caucus blog at the New York Times.

"Isn't Blair House big enough for everybody? Bush was just afraid nobody would pay any attention to him with Obama in the house," another said.

Mr Bush was accused of favouring a mate over a political rival.

"What makes it worse is that this administration is once again going out of it's way to do little favours for their friends at everyone else's detriment," a blogger to the Watergate Summer site said.

But not everyone was against the decision.

Jack Moss, host of The MacRanger Show on Blog Talk Radio, is defending the decision, saying President-elect Obama should wait in line like "ordinary folk".

"Obama has done diddly squat for the country, as opposed to John Howard who supported the US and our efforts on the war on terror while Mr Obama talked down our efforts and called our troopers rapers and pillagers," he said.

"This is most fitting."

The British broadsheet The Times reported that Britain's former prime minister Tony Blair, who is also to receive the Presidential Medal, declined an invitation to stay at Blair House because he didn't wish to be "the man who bumped Obama".

He was expected to bed down at the British Embassy instead, The Times said.