Controversial plans to house asylum seekers in a seafront hotel have been put on hold after a series of blunders by the Government.

The Home Office wants to use the Grand Ocean Hotel in Saltdean as emergency accommodation.

It denied the plan when we first revealed it in November last year.

Then earlier this month we exclusively revealed the hotel was to be used, with the Home Office blaming a "clerical error" for the previous announcement.

Now the plan has been put on ice following a storm of protests from residents in the Brighton suburb, which is popular with elderly, retired couples.

The decision to delay was made yesterday following a crisis meeting between Brighton and Hove City Council, police, the health authority and officials from the National Asylum Support Service (Nass).

It came less than 48 hours after Home Secretary David Blunkett accused the immigration and nationality directorate of "incompetence" following a row over similar plans for a hotel in Sittingbourne, Kent.

Council chief executive David Panter said afterwards: "We received a clear commitment from the officials there would be no placements in the hotel until, and unless, a package of issues and concerns has been resolved.

"It was a very useful meeting, if at times tense. It was clearly taking place in the light of events at the hotel in Sittingbourne and comments from the Government minister Beverley Hughes."

Immigration minister Ms Hughes has demanded a review of the business operations of Nass, the Home Office agency responsible for induction centres, saying consultation had not been good enough on plans to use 111 places at the Kent hotel as an asylum induction centre.

She said: "We have to do much, much better."

Council leader Ken Bodfish, who attended the meeting, said: "We have made it very clear to Nass that we believe discussion and consultation to date has been very inadequate.

"However, no one here wishes to do anything which would incite or inflame the ugly face of racism and I echo the statements made by the Home Secretary David Blunkett along these lines.

"I am pleased this process has been put on hold so the many outstanding issues and concerns can be fully explored. This will clearly take several weeks, if not longer, and nothing whatsoever will happen until then.

"I hope the residents of Saltdean will recognise the progress we have made."

Meanwhile, Rottingdean ward councillor David Smith said protesters might apply for an injunction preventing asylum seekers staying at the Grand Ocean pending a judicial review.

Coun Smith said: "When people are kept in the dark, it is not surprising they start to fear the worst.

"We have been promised more consultation now, which hopefully will include residents and not just council officers."

Saltdean Residents' Association planned to hold a demonstration outside the hotel in Longridge Avenue on Saturday but this may now be called off.

Anita Officer, of Wicklands Avenue, Saltdean, said: "The initial reaction to the latest announcement was a sigh of relief but we cannot be lulled into a false sense of security.

"It is good to hear Mr Blunkett recognises things are not being handled properly but how long will it be before the next government U-turn?"

Marco Pasquale, chief executive of the hotel group, has said the hotel would only take in a small number of asylum seekers on a short term basis and accused opponents of scaremongering.

He said: "The amount of absolute nonsense that emanates from Saltdean residents is unbelievable.

"The hotel, like many others in the Gatwick area, has for many years provided various authorities with accommodation rooms for assessment programmes for foreign individuals legally residing in the UK.

"This kind of business involves between six and 20 rooms and two meeting rooms for between three and seven days' stay and is subject to availability.

"The more hysteria created, the more our businesses will suffer and our houses devalue."