MERSEYSIDE councils are braced for a flurry of legal claims if the region’s housing market renewal scheme collapses after the Government pulled its funding.

Under planning laws, householders can sue for blight if the value of their home is affected by proposals.

Liverpool council leader Joe Anderson will today travel to London to meet housing minister Grant Shapps to lobby the Government to provide substitute funding.

It comes after it was revealed that swathes of Liverpool’s most crumbling neighbourhoods could be left derelict for years after the Government pulled the plug on the Housing Market Renewal Initiative (HMRI).

Up to £200m was needed to complete the scheme to breathe new life into hundreds of homes.

Cllr Anderson said the irony was that during his visit to London he will also discuss the Conservatives’ Big Society plans with Lord Wei.

“On the one hand, the Government has pulled the HMRI funding and splitting asunder our communities, and then it wants to talk about the Big Society.”

In a separate move, Cllr Anderson and Cllrs Tony Robertson and Jeff Green, leaders of Sefton and Wirral councils, have written to communities secretary Eric Pickles to demand action over the withdrawal of HMRI.

The joint letter states: “You will appreciate that this programme is at a critical stage and withdrawal of funding will not only mean a failure to deliver on the original promises, but much of the investment to date will be wasted.

“We fully appreciate the economic difficulties you face, but the funding mechanisms that have been suggested as an alternative/replacement for HMRI resources are either inadequate or unrealistic.”

The letter reveals the councils are seeking legal advice about the potential for home owners to seek blight notices due to the poor state of neighbourhoods that could remain derelict for years.