A three-course lunch hosted by an eccentric Chinese millionaire for 250 homeless New Yorkers in a posh restaurant degenerated into fury Wednesday when guests were denied $300 cash handouts.

It had seemed such a good idea. Recycling tycoon Chen Guangbiao last week took out ads in American newspapers promising a first-rate meal at the Boathouse in Central Park and $300 each.

Guests were bused in and treated to a sit-down meal of seared tuna, filet mignon and seasonal berries, waited on by staff in suits and bow ties, but anger flared over the cash no-show.

As Chen spoke to a gaggle of Chinese journalists while dessert was being served, one guest started shouting.

"Don't lie to the people!" Ernest St Pierre told AFP. "We came here for $300 but now he's changed his tune."

Chen announced through a translator that he was heading to the New York City Rescue Mission -- which helped organize the lunch -- and invited guests to join him there.

"This individual who's filthy rich put it in the paper," St Pierre, a former US Navy medic, told reporters.

Retired Vietnam War veteran Harry Brooks told reporters he would be "highly upset" if he didn't get the cash, despite enjoying the food "very much."

"I could use $300," he said. "Clothing for one thing," he said gesturing at his shabby attire when asked how he would spend it.

Not all guests were unhappy. Many said they enjoyed the food and called the experience "beautiful," saying they were touched that someone had flown all the way from China wanting to help.

- 'Fraud' -

But as they were herded outside to queue up to get the bus back, complaints multiplied.

Quin Shabazz, 34, said he felt the homeless had been exploited and branded the lunch -- covered by a mob of TV cameras and reporters -- "a big publicity stunt."

Al Johnson, 42, said he had been banking on the money to get his life together and go home to his family in Texas.

"This was going to change my life," he said. "Fraud. This is fraud with a capital F," he added. "I feel used for a photo op."

Craig Mayes, executive director of the New York City Rescue Mission, was left to deny there had been any injustice.

"I'm really sorry. It was misrepresented in the paper," he said.

Michelle Tolson, director of public relations at the Mission, said Tuesday that no cash would be handed out to individuals and that it had taken 1.5 months of negotiations to convince Chen to instead donate $90,000 to the group.

The money would be ploughed straight into the Mission's $5 million yearly expenses to feed and house people, she said.

The shelter provides people with a hot meal, a clean shower and a safe bed, clothing and assistance in addressing their problems.

Chen, known for publicity stunts and reportedly worth an estimated $825 million, serenaded his guests with a rendition of the 1985 charity single "We Are the World."

The smiling, bespectacled businessman said he wanted to give back after wealthy Americans had contributed to relief efforts after disasters in China.

"Hopefully, I will really lead the way to encourage other people who are in a position to help to follow through," he said.

Coalition for the Homeless says around 60,000 homeless men, women and children bed down in New York's shelters and thousands more who sleep rough on the streets or elsewhere.

The number of homeless New Yorkers has risen by 75 percent since 2002 and in recent years has reached the highest levels since the Great Depression of the 1930s, according to the advocacy group.