Government could be landed with an even bigger housing problem if it continues to put the squeeze on the Canadian Hotel after owner Thomas Powell claimed he is unwilling to foot the bill for more renovations.

The Planning Department is considering enforcement action over Mr. Powell's reluctance to install hard-wired smoke alarms and enclose staircases at the 55-bed low-rent hotel.

But Mr. Powell said he would not be spending the $200,000 plus costs, of the work because he was due to demolish the building to replace it with an office block. Mr. Powell declined to say when he that work would begin.

Mr. Powell said Mr. Bascome had plenty of warning about the closure which will add to the homelessness problem.

He said: "But no one took the bull by the horns in preparing for it.

"Government should be looking at the whole situation. I asked them what are they doing about this situation and they have no answer. Just because I have property that lends itself to accommodation of this type doesn't mean I should be responsible for providing it."

He said Mr. Bascome was aware that the Canadian Hotel was due for demolition back in 1988, when he worked in social services, so he had ample time to think about replacing it when he became housing minister ten years later.

And Mr. Powell said Mr. Bascome had gone on record in December 2000 about the shortage of accommodation for single men and the problems the closure of the Canadian Hotel would cause.

Mr. Powell said: "I am doing my best to provide the community a service for the last 20 years that is not even my responsibility.

"I have offered it to both governments but they don't want it but they don't want me to close it because they need it."

He said he feared for the residents who would be forced on to the street if the hotel had to close.

"I could fill that hotel with 200 people in two weeks with the number of people coming to me on a regular basis."

He slammed the planning and housing sections of Government for giving mixed messages about his business. "There are things which planning has requested which could run to a couple of hundred thousand dollars and I am not about to put that into a property that is about to be demolished."

Planning is upset that the gates are locked at night but Mr. Powell said that was done at the request of tenants, who are sick of drug dealers and users roaming the premises at night and causing damage.

He said: "Tenants all have their own key."

Battery powered smoke alarms have been installed but Government is insisting on alarms which operate as an integrated system, said Mr. Powell, adding: "Some civil servants seem to think the tenants will be safer on the street than in that building."

And Opposition Housing Spokesman Michael Dunkley said Government should be offering incentives to encourage landlords offering low-budget accommodation and encouraging those currently in that business.

He said: "It's not something you can make much money from."

Mr. Dunkley said Mr. Bascome had been slack about providing low cost accommodation despite pre-election promises that it would be addressed, adding: "They can't make excuses."

He said Southside should have been used for temporary accommodation while more permanent deals were sorted out with the private sector and he attacked Government for moving with such speed to get bigger cars for themselves but being so slow to address serious housing needs.

Mr. Bascome failed to return calls yesterday.