A council has warned it could be forced to effectively declare bankruptcy if it has to fund housing for thousands of people of Chagossian descent.

Crawley BC said if it was required to provide housing for the 4,000 people the Foreign, Commonwealth and Development Office has estimated will come to the borough it would ‘likely’ force the local authority to issue a section 114 notice.

Some 5,000 Chagossians are expected to move to the UK by taking advantage of new legislation that will open a route to British citizenship next week, with Crawley already home to by far the largest community in the UK.

The route was opened after Britain forcibly evicted people from the Chagos Islands in the Indian Ocean in the 1960s and 1970s so the United States could build a military base.

Now, the leaders of Crawley and West Sussex CC have written to the Government to warn of an ‘imminent funding crisis’ caused by its decision to grant British citizenship to Chagossians.

Both councils said they had ‘grave concerns about housing costs and the implications on public services,’ with the sums involved ‘beyond the means of even the largest local authorities’.

Crawley officers have been raising concerns with Government officials ‘for many months’.

A letter this week to local government secretary Michael Gove read: ‘It has become increasingly evident there has been no planning for the practical implementation of the new legislation or any impact analysis of the experience of those taking up the offer to settle in the UK.’

Leader of Crawley, Michael Jones, said: ‘This is an international issue, and council taxpayers should not be expected to foot the bill and have their services compromised as a result of paying for this.’

West Sussex’s deputy leader Deborah Urquhart added: ‘We do not have the infrastructure, services or funding to cope with the potential numbers of Chagossians wanting to settle in West Sussex.’