A London borough has u-turned on plans to send homeless families more than 90 minutes outside the capital after public outcry.
Tower Hamlets mayor Lutfur Rahman had proposed putting households in temporary accommodation outside out of London and the home counties in a bid to save money.
But the plan prompted one of Mr Rahman's independent Aspire councillors to quit his administration in fury and was criticised by the Labour opposition.
On Wednesday night the mayor backtracked.
Mr Rahman said: "There has been much scaremongering and misinformation about this proposed policy over the past week, in a way that plays politics with the lives of our residents,
“My role as executive mayor is to rise above the politics and listen through the noise to what our residents are actually saying.
“As a result of this listening, I am suspending the implementation of the proposed change to the Homelessness Placement Policy to allow us more time to properly review and assess its implications for people.
“As things stand, the 90-minute limit on relocation remains in place.”
Tower Hamlets has more than 2,000 families placed in temporary accommodation and over 19,000 households on its housing waiting list.
Under current rules, the council cannot move people more than an hour and a half away from the borough.
But the town hall had proposed placing some people as far afield as the midlands and northern England.
Councillor Kabir Hussain resigned from the Aspire Party in protest at the move earlier this week.
“My commitment is to the community and my constituents first, not blind loyalty to any party or individual,” he said.
“Over the years, I’ve seen firsthand the double standards and hypocrisy in policies that betray our residents and voters.”
Labour councillor Marc Francis said: “This U-turn by Mayor Rahman is welcome... thanks especially to all those homeless families who raised their concerns about the Mayor's ill-judged policy.”
Mr Rahman said the number of families living in hotels in Tower Hamlets had reduced from 43 last year to just one as of this week.
He added: “A perfect storm of low house building nationally, the government benefits cap and an increase in no fault evictions have evictions has created immense pressure on our homelessness services.
“The result of this pressure means that - as is typical across London and the wider UK - many families in Tower Hamlets found themselves temporarily housed in hotels, rather than in appropriate, high quality residential facilities.
“Not only is this arrangement financially unsustainable - pushing some councils into bankruptcy - it has a human cost that is completely unacceptable to us and which we sought to resolve.”
It comes as councils warned homelessness and the housing crisis was having a "devastating impact" on Londoners and "wreaking havoc" on boroughs' finances.
"Skyrocketing" numbers of homeless people requiring temporary accommodation and the growing strain on social housing budgets means several local authorities in London are edging closer to effective bankruptcy, it is claimed.
In its submission to the Treasury ahead of the Budget on October 30, London Councils, the cross-party body which represents all 33 councils in the capital, said housing and homelessness pose the "fastest growing risk" to the financial sustainability of its member authorities.
The umbrella group estimates one in 50 residents in the city is homeless.
Claire Holland, chairwoman of London Councils and Labour leader of Lambeth council, said: "The housing crisis is having a devastating impact on Londoners' lives and wreaking havoc on town hall finances across the capital.
"At a time when we need to invest in social housing and support homeless Londoners, boroughs are facing an unrelenting squeeze on our resources.
"The unavoidable reality is that spiralling costs and years of underfunding threaten to break boroughs' budgets.
"The current outlook is bleak, but we are committed to working with the Government to find a better way forward.
"The upcoming Budget is a crucial chance for the Government to restore much-needed stability to council finances and the local services we provide.
"This will enable boroughs to play our part in tackling the capital's housing crisis and driving economic growth in London and across the country."
