A London council has been accused of 'social cleansing' after it asked a housing association in Stoke-on-Trent to take in 500 families it could 'not afford' to house in London.
Newham council said the cost of renting private accommodation for the families was too high, and would not be covered by housing benefit.
Its officers approached the Stoke housing association 170 miles away because the market was starting to "overheat", it said - partly due to the "onset of the Olympic Games and the buoyant young professionals market".
A letter Newham wrote to Stoke-on-Trent's Brighter Futures Housing Association, published by the BBC, added that it had been "forced to look further afield for alternative supply".
Gill Brown, the CEO of Brighter Futures, told the BBC that "there is a real issue of social cleansing going on".
"We are very anxious about this letter which we believe signals the start of a movement which could see thousands of needy people dumped in Stoke with no proper plan for their support or their welfare," he told the BBC.
Robin Wales, mayor of the borough of Newham, said that the area had "massive overcrowding" and "a waiting list of 32,000".
He said the council had written to "lots of places" about taking the families, and that it was not just looking to "push everybody to Stoke".
"There just isn't the capacity to deal with them," he told BBC Radio 4's Today programme.
"Any places we can get we will get… the truth is that you think they may be there, they may be gone, we know it is very difficult to get property in this borough."
"We're not looking to push people to one place, we're looking to find the best possible solution."
But Grant Shapps, minister for Housing and Local Government, told Today he did not accept Newham's argument, accusing them of "playing politics" with housing benefit.
"The system is still very generous," he said. "I think Newham are perhaps playing politics since we're in an election season."
Shapps said London would "get a big share" of 170,000 affordable homes scheduled to be built before 2015.
"A search on [property website] Right Move within a five-mile radius of Newham there are nearly 1,000 homes available," he said. "I think you have to factor in it's election time, it's a Labour council."
Sinéad Butters, who is the chair of the North Area Social Housing Forum (Nash) which includes the Brighter Futures Housing Association, said the council's offer would "exacerbate the social problems we are increasingly seeing".
“In the first instance, it takes no account of the people involved, who should be at the heart of any housing decision," she said.
“Secondly, while Newham Council would pay the rent for the tenants they relocate, the families would come with additional support costs and benefits needs, which Newham would simply pass on."
The chief executive of housing charity Shelter, Campbell Robb, said: "This is the terrifying reality of our housing crisis today - hundreds of families potentially forced to move halfway across the country, uprooted from schools, support networks and employment opportunities.
"Most worryingly, this is only the thin end of the wedge, as further reductions in the housing safety net start to bite over the coming months."
"The dangerous cocktail of cuts to housing benefit and spiralling rents is making finding a decent home increasingly unaffordable for families across the country."