Newham Council in east London has written to 1,179 housing associations across the country, including one over 160 miles away in Stoke-on-Trent, in an attempt to find accommodation for the 32,000 families on its waiting list for housing.
Robin Wales, the mayor of Newham blames the combination of rising rents and the government cap on housing benefit, saying the council can no longer afford to house tenants in privately-owned accommodation.
However, the Housing Miister, Grant Shapps accused Newham Council of "playing politics" and claimed that there are around 1000 empty homes in the area available at rents within the benefit cap.
Commenting on the news, Shelter’s Chief Executive Campbell Robb said: "This is the terrifying reality of our housing crisis today – hundreds of families potentially forced to move half way 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.
"Those unable or unwilling to move away from their local area may be forced to overcrowd or accept a home in appalling conditions to make ends meet.
He concluded, "We urge national government to look at the potential damage this will do to some of our most vulnerable people."
Gill Brown, chief executive of Brighter Futures, the Stoke-on-Trent housing association contacted by Newham said, "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.”