A HOUSING association at the centre of reports alleging it had collapsed with debts and hundreds of homes were threatened, has slammed Tory councillors for spreading false rumours.

West Hampstead Housing Association (WHHA) denied the allegations that it had been ruined by a debt of £8 million and that families occupying more than 250 managed homes in Brent and Harrow were threatened.

The row began after Brent Conservatives claimed the council would need emergency measures to deal with the consequences of the 'collapse' and avoid footing the bill.

Cllr Jim Sullivan, Conservative spokesman for housing, said that Paddington Churches Housing Association (PCHA) had taken over responsibility for the rents but had refused to bail WHHA out.

"I have not been brought up to date with what the council is going to do to safeguard our tenants and the council is in an appalling situation after the collapse of the West Hampstead Housing Association," he said.

"I am waiting to hear how much this will cost the council and how the council intends to address this serious situation."

Brent Council has revealed 'urgent negotiations' were taking place with both WHHA and PCHA, which falls under the umbrella of parent company Genesis Housing Group.

The group was appointed in May 2000 to manage WHHA by the Housing Corporation following concerns regarding its financial situation.

However, a spokesman for the Genesis Housing Group said he was furious by the 'inaccurate' claims and would be raising the issue with the councillors.

"WHHA has not collapsed. Bailing out WHHA is not the issue and there is no question of anyone needing to take on WHHA's debts as it remains a legal entity in its own right. There are also a number of initiatives in place to recover the debts," he said.

"The tenants of WHHA remain our prime concern and we are working closely with the Housing Corporation, local authorities, staff and tenants to resolve the current situation."

A spokeswoman at Harrow Council added: "West Hampstead Housing Association has advised us of its financial difficulties in funding the temporary accommodation scheme in Harrow and the council is working with it to resolve the issues.

"WHHA owns 25 permanent homes in Harrow and is to sell one empty property as part of its rescue plan. This will not result in any loss of nominations for Harrow."

By.Nina Palmer