SWINDON has been told it may have to increase its number of asylum seekers by nearly six times.
But council leaders have written to the Government warning that a new influx would push up rents and add to the crisis in education and social services.
There are currently 142 asylum seekers receiving financial assistance from Swindon Council, the majority from Kosovo but others from Iran, Iraq and Afghanistan.
But according to council officials there could be many more not registered with social services, making a total of around 500.
The Home Office says Swindon should be able to accommodate 900 asylum seekers under its scheme to disperse such immigrants around the country.
And it has signed a contract with private company Clearsprings to house 250 in Swindon mainly in the private rented sector.
Lead member for housing Mavis Childs (Lab, Walcott) said: "If we had surplus housing it would be immoral not to house these people. But we have got an acute shortage of affordable housing in Swindon."
She said there are currently 5,000 people waiting for accommodation on Swindon's social housing register, and warned that putting more asylum seekers in private accommodation would have a knock-on effect for letting rates.
She said: "We need breathing space to do what we have got to do. We really can't afford to any devote any more resources to this and that is what I have told the Home Office.
"The situation really is dire in Swindon and I've got responsibility for housing and I've got to fight Swindon's corner."
Swindon Council is also among a number of councils in discussion with Kent County Council over providing accommodation for some of the estimated 100-150 new unaccompanied asylum seeker children who come through Dover every month, many of whom would have stayed at the Sangatte refugee centre in Calais.
The council's cabinet is likely to spell out the effect of taking extra refugees when it meets to discuss the issue on October 15.
Council Conservative leader Mike Bawden (Con, Old Town and Lawns) said: "The last thing in the world we want to do is bring in people who will demand a high level of attention from education and social services."
But Councillor Jim D'Avila (Lab, Moredon) said he believed Swindon has a moral duty to look after asylum seekers.
He said: "If groups opt out the burden falls unfairly on the shoulders of minorities and this can cause potential difficulties in society."
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