A paedophile was put up in a £53-a-night family hotel after probation officers ran out of space at supervised premises for high-risk offenders.
Staff at the Premier Travel Inn in Polegate were not told Peter Wilson was a convicted sex offender who had just been released from jail but complained when they discovered who he was, two days after he had checked in.
Wilson, 58, had been convicted of sexually assaulting three boys and jailed for ten years at Lewes Crown Court but was released earlier this week after serving his sentence.
The Home Office has a list of 100 "approved premises" for high-risk offenders, places where they can be closely supervised and monitored by trained staff.
The majority of such hostels are approved to accept paedophiles who are then assessed by probation officers who decide how much of a risk they pose to the public.
However, the Probation Service said there were no approved premises available in Sussex to house Wilson so on Monday they sent him to the Premier Travel Inn, whose staff were not told he was a paedophile.
Hotel staff confirmed there were a number of families with children staying there during Wilson's two-night stay at taxpayers' expense.
Staff rang the local authority on Wednesday to raise concerns about Wilson staying at the hotel and he was then moved.
The Probation Service said it had tried a number of other locations but decided the Premier Travel Inn would be the best temporary accommodation for Wilson after failing to find him a bed elsewhere.
It said: "Unfortunately it was not possible to place Peter Wilson in an approved premises immediately on his release from prison.
"The police and probation services therefore considered a range of options available to them and following risk assessment concluded the Premier Travel Inn was the most appropriate place."
A Probation Service spokesman also said the Premier Travel Inn was chosen because it was outside main communities and away from schools, public playgrounds and other places Wilson is forbidden to visit. This is despite the hotel being about 400 metres from Polegate Primary School, less than half a mile away from playing fields and one mile away from Willingdon Primary School.
The Probation Service admitted it should have told hotel staff who Wilson was.
A spokesman said Wilson was monitored throughout his stay at the hotel and reported every day to probation staff at Eastbourne.
Emma Scott, of Premier Travel Inn, said: "Staff were completely unaware of the nature of his past. As soon as it was discovered who he was staff contacted the local authority and he was moved on."
Eastbourne MP Nigel Waterson said he was horrified when he learnt what had happenedand would write to the prisons minister to express his concerns.
He said: "I shall be asking some very pointed questions about what arrangements are made between the Probation Service and the police to make sure paedophiles are put in proper accommodation and not close to children. Putting this man in a hotel next to a family-orientated restaurant is wholly inappropriate."
Polegate residents were shocked that a convicted high-risk paedophile could be put in to the hotel.
John Humphrey from Greenleaf Gardens said: "It's absolutely sickening that such a person should be allowed to be in a hotel like that without anyone knowing."
A spokesman for the Probation Service said placing Wilson in the hotel was a better option than allowing him to find his own accommodation."
He has now been moved into approved premises.
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