A seaside hotel will not be used to house asylum-seekers after the Government backed down on controversial plans.

The Home Office has ruled out using the Grand Ocean Hotel in Saltdean as an induction centre following months of controversy.

Home Office minister Beverley Hughes announced the hotel had been ruled out for good, as had another hotel in Sittingbourne, Kent.

Although the induction centre programme would carry on, existing arrangements would be expanded instead.

The decision was warmly welcomed by residents and councillors who campaigned against the proposals.

They argued Saltdean did not have the resources to cope with an influx of refugees and also feared a rise in crime.

The Argus revealed in November last year how the Home Office had earmarked the hotel as emergency accommodation for refugees.

The Government first denied the plans but then backtracked, blaming a "clerical error" for the previous announcement.

The proposals were put on ice in January following a crisis meeting between Brighton and Hove City Council, Sussex Police, the health authority and the National Asylum Support Service (Nass).

David Panter, city council chief executive, said: "We are pleased to now have this clarity after all the confusion created earlier in the year.

"In talks with the asylum service, the council always made it clear we felt the hotel was unlikely to be suitable as an induction centre.

"However, we do recognise the problems the Home Office has in finding appropriate accommodation and overseeing a reasonable and measured debate."

Kemp Town Labour MP Des Turner said: "I am delighted the Government has listened to local representations on this issue.

"There was a lack of infrastructure - for instance there are not enough GP surgeries in Saltdean."

Rottingdean Tory councillor Lynda Hyde, whose ward covers the area, said: "Saltdean has never been suitable for large numbers of asylum-seekers. The Home Office has caused unnecessary worry for the people of Saltdean.

"Residents and councillors have spent endless hours in fighting the proposal for such large numbers."

Saltdean Residents Action Group was set up specifically to fight the plans.

Group member Greg Bishop, of Saltdean Vale, said: "I think everyone will be pleased to hear this announcement.

"I just hope after all the U-turns and people going back on their word, this decision will be final."

Green Party candidate Geoffrey Bowden said: "We regret some people did not adopt a more civilised and welcoming attitude in the first place. Instead, they opted for a knee-jerk xenophobic approach."

Marco Pasquale, chief executive of the Grand Ocean Hotel Group, said in February asylum-seekers would be allowed into the hotel "over my dead body".

Prime Minister Tony Blair admitted to MPs in January that lack of consultation over the hotel plans had been "inadequate and wrong".

Asylum-seekers typically spend between seven and ten days at the induction centres before being dispersed around Britain.

l Another centre in Sussex used to detain asylum-seekers and illegal immigrants has been criticised for "institutional blindness".

Tinsley House, based at Gatwick, holds people waiting to be deported from the UK.

Government inspectors said the centre provided a "place of safety" with a good standard of care.

However, the inspection report, which was published today, criticised staff for failing to give detainees sufficient notice of what was happening to them, or where they were to be sent next.

Detainees were also not given a chance to contact family, friends or legal representatives.