A Sussex Labour MP has said the Government should honour its promise to plug a loophole under which leaseholders risk their homes for small debts.

Brighton Pavilion MP David Lepper said Tony Blair's administration had pledged to abolish forfeiture, one of the most disliked aspects of the leasehold system.

Leaseholders still face losing their homes for debts of more than £500, despite the Commonhold and Leasehold Reform Act, which became law this week.

Mr Lepper said: "This is a pledge I am going to be keeping the Government to because I still think that is the big iniquity in leaseholding."

Removing the threat of forfeiture for debts less than £500 was a late addition to the new rules.

The Brighton, Hove and District Leaseholders' Association was praised by housing minister Sally Keeble after it sent 6,500 letters to MPs calling for the system to be abolished.

Shula Rich, who chairs the association, said leaseholders would continue to be threatened until the system was scrapped entirely.

She said: "With this last- minute change to the bill a historic principle has been breached. We will now continue to press for the complete abolition of forfeiture and for leasehold debt to be treated the same as any other debt.

"This is a reform that could have changed lives. What good is a reform bill when your flat can be taken away for a debt that may be 100 times less than its value?"

Leaseholders will be able to replace their managing agents and manage their blocks using the new rules.

Brighton and Hove has an estimated 25,000 leaseholders, more than anywhere in England and Wales outside London.