Boris Johnson's commitment to affordable housing in London has been called into question after council bosses hit back at a bid to sell almost 90% of a planned 700-home estate on the private market.

The boroughs of Islington and Camden have released an expert report that claims the Royal Mail could afford to fit four times more affordable homes on its prime Mount Pleasant sorting office site than it is currently proposing as part of an estimated £1bn sell-off.

The recently privatised group has applied for permission to build just 12% affordable housing on the eight-acre central London site and claimed that any more would render redevelopment not viable. But the two boroughs which the site straddles now claim it could still make a profit if half the homes were affordable – either for social rented housing or shared ownership. If their analysis is right it would allow an extra 270 affordable homes to be built on the land.

Last week, Camden's planning committee unanimously voted to oppose the scheme, which will go before Islington's planning committee on Monday. But the final power to grant consent to the scheme, which has been opposed by locals, has been taken out of the councils' hands by the mayor, who has decided to exert his right to grant approval for schemes which he considers strategically important.

The decision is being watched by David Cameron, who told parliament last month he was "happy to look at the site" when asked if he could help raise the number of affordable homes.

"When the viability report shows you could include 50%, 12% affordable housing is an insult," said James Murray, Islington's cabinet member for housing. "The newly privatised Royal Mail is just chasing profit and our concern is that Boris Johnson is going to wave this through with too few affordable homes."

The mayor's office has committed to building an extra 13,200 affordable homes a year and the Camden/Islington report by BPS Chartered Surveyors claims 350 could be built on the Mount Pleasant site instead of the proposed 81, based in part on analysis by property consultants Gerald Eve.

"There is strong evidence to show that a number of assumptions adopted are flawed or at least very likely to be open to alternative assumptions over time," the report states. "We have revised Gerald Eve's appraisal to determine whether there may be scope for additional affordable housing provision to be made over the 12% currently offered. The results based entirely on present-day costs and values … indicate that a policy compliant level of 50% affordable housing could be provided. When future growth is applied there is potential for an even higher level of affordable housing to be provided."

The Royal Mail Group is not planning to develop the site itself but sell it on after securing planning approval.

Martin Gafsen, Royal Mail Group property director, said 12% was the "maximum reasonable" level of affordable homes because of the "very significant costs of undergrounding all of the lorries and vans and the loading bays that service them" to make way for new homes.

He said: "To date no agreement has been reached as to the final provision, and discussions around viability continue between Royal Mail, the GLA and the local authorities. The final decision rests with the mayor of London."