A gang of squatters has occupied an 18th Century mansion in one of London's most desirable areas.

The Grade II*-listed townhouse in Covent Garden has already been covered in graffiti and is to be used for raves by the 15-strong group, according to national newspaper reports.

Owners of the King Street building - valued at up to �20m - are furious that they now could have to wait weeks to get the squatters evicted.

One squatter, Nick, 25, from Munich, told one newspaper: "We intend to stay here for as long as possible and use it as a major party location."

Court order

He added: "This building is fantastic, it's free and nobody is using it."

Fellow resident Julie, 22, a French waitress, said: "It's well known in Europe that, thanks to English law, we are given plenty of time to get out."

By moving in, the squatters became the recognised occupiers of the property.

It would be illegal for the owners to take back posession of the house without a court order.

The Metropolitan Police say they cannot act unless there has been an allegation of criminal damage.

Meanwhile, agents for the owners, pension fund managers Scottish Widows and Henderson Global Investors, have started court action.

Former residents of the building, which was built in 1716 for the Earl of Oxford, include the poet Samuel Taylor Coleridge and the composer Thomas Arne.

The five-storey mansion, which was used as offices, is to be converted into homes.