The Yarl's Wood detention centre has been temporarily shut down because an "adequate" level of insurance could not be found.

The Group 4 security firm announced services were suspended from midnight on Sunday.

A riot in February led to a fire which caused about �38m of damage at the 900-person centre in Clapham, Bedfordshire.

Loss adjusters are believed to have offered a renewed insurance policy that fell short of the estimated damage costs and to have added restrictive clauses.

The cover that the insurers were prepared to pay was considerably reduced and not considered adequate

Group 4 spokesman

Up to 90 asylum seekers still at Yarl's Wood have been transferred to other centres in the past few days.

A Group 4 spokesman said: "The insurance cover was due for renewal from midnight 31 March.

"The cover that the insurers were prepared to pay was considerably reduced and not considered adequate.

"The contract that Group 4 has with the Home Office stipulates that there must be adequate cover and Group 4 would not run an operation without it."

The centre was considered state-of-the-art

No staff cuts are planned and a skeleton staff will remain on site. Talks between Group 4 and the Home Office to secure new insurance cover are expected to take place "in the coming weeks," the Group 4 spokesman said.

Two accommodation blocks were destroyed in the fire at Yarl's Wood which was started on 14 February.

The state-of-the-art centre had only been launched in November last year and included healthcare, recreational and religious facilities.

The Yarl's Wood fire and another at Harmsworth detention centre in west London just days later has raised the issue of insurance risks.

Malcolm Tarling of the Association of British Insurers said: "Companies will look at the risk they are being asked to insure against and if that risk has grown materially they may feel they are unable to provide cover.

"September 11 meant that companies had to start thinking the unthinkable.

"They will have to look at the chances of a claim arising from fire, damage and take in security and risk management."