Plans to convert a hotel in Kent into a reception centre for asylum seekers may not now go ahead,

Home Office minister Beverley Hughes is to look again at housing asylum seekers in the Sittingbourne hotel.

Ms Hughes said consultation about turning the Consiton Hotel into a temporary centre for refugees had been inadequate.

And in the Commons, the Home Secretary David Blunkett described the process as "incompetent" and said a review of the contractual arrangements will be carried out.

Speaking on BBC Radio 4, Ms Hughes criticised the National Asylum Support Agency for not going back to the local authority and the community to allow views to be aired.

She said: "I am looking again at this option in terms of where the contractual relationships are up to and what I may be able to do about it.

Legal challenge

"Secondly I have also ordered an independent review of Nas business operations because I think we have to do this much, much better."

Work to convert the hotel, which will be the first centre to screen new arrivals, started on Monday to provide 111 places for asylum seekers to be held for up to 10 days.

The National Asylum Support Service is expected to begin using the hotel on 29 January.

But the plans have caused anger among residents and politicians.

Conservative leader Iain Duncan Smith called the plan a "panic, last minute move" because the government had "completely lost control" of the asylum system.

This is our finest hotel - so you can imagine how it has gone down locally MP Derek Wyatt

Sittingbourne and Sheppey Labour MP Derek Wyatt, also attacked the plan.

He said it was "outrageous" and promised a legal challenge.

Mr Wyatt said the owner had believed he was selling to another hotel operator only to discover it was being sold to accommodation company Accomodata.

He said: "This is our finest hotel, so you can imagine how this has gone down locally - weddings cancelled, ballet lessons cancelled, Rotary lunches cancelled.

Mr Wyatt: Legal challenge

"There has been no public consultation. It has all been done in secret."

Mr Wyatt said Kent could no longer cope with the numbers of asylum seekers arriving in the country and called for a two-year moratorium to ease the situation.

Home Secretary David Blunkett defended the use of hotels as induction centres.

He conceded the policy was unpopular but said it was vital for security reasons that people were screened on arrival.