One borough's letting agencies met this week to discuss how to avert a financial crisis caused by the asylum seeker amnesty.

Hundreds of asylum seekers will have their housing contracts cancelled by Enfield council's asylum team when they are granted leave to remain in the borough.

And with the Government wanting asylum seekers to stay in their current homes as private tenants, estate agents fear they could be left picking up the pieces.

Vassilis Mavrou, of Varosi Lettings in Tollington Park, Finsbury Park, lets to dozens of asylum seeker families in Enfield through the council's leasing scheme.

He said: "It's a catch-22 situation take it or leave it, the council is saying, but I have 200 families in my properties and I don't know what to do with them.

"If they are out of work, we face vastly reduced rents paid by the Housing Benefit Agency, and if we choose to evict, we have been told the council will no longer use our property."

Mr Mavrou says although he currently receives up to £2,000 in rent per month from the asylum team for a three-bedroom house, he will receive less than half that figure in housing benefit.

He said: "The council can book these places and then it abandons them as soon as it has the opportunity. But it will cause us problems because we have arrangements with our landlords based on our original agreements with the council.

"The landlords will have all the rights in the world to take me to court, because I will not be able to uphold any financial obligations to them."

Up to 50 estate agents met on Wednesday evening, along with Haringey Council's executive member for housing, Isidoros Diakides, and Enfield's Labour councillor George Savva, to discuss a way forward.

A council spokeswoman said: "The Government's view is that negotiations should be happening to ensure those families remain in the same properties they have occupied for a number of years, as private tenants of the landlord or agent.

"The Association of London Government has agreed this is the best line of action, the alternative being a potentially large number of homeless applications.

"Agents can set their own rent, but will then be paid by the Housing Benefit-assessed rate, which may well be less than what they were being paid through the asylum team.

"If agents choose to evict the family then they have been told that boroughs have agreed not to use the property for future council tenants."