This means shifting families a distance of 167 miles. Newham claims the move has been forced on them because of the £400 housing benefit cap for larger properties.
Newham contacted Stoke-on-Trent's Brighter Futures Housing Association claiming local market rents were too high to house tenants on its waiting list. Gill Brown, boss of Brighter Futures, condemned the Newham move.
"I think there is a real issue of social cleansing going on," she told the BBC. "We are very anxious about this letter which we believe signals the start of a movement which could see thousands of needy people dumped in Stoke with no proper plan for their support or their welfare."
Newham though is offering to pay 90% of Brighter Futures 90% local housing allowance plus an extra £60 per week. This offer, reckons Brighter Futures, would save Newham more than £5,000 a year for a family living in a three-bed house.
Benefits?Now Brighter Futures wants the Local Government Association to agree to a code of conduct that would mean homeless people could not be moved unless the permission of the council in the new area granted consent.
The London Olympics has brought Newham Council considerable investment and money. Given Newham's recently increased wealth and prestige, is it that difficult for it to come up with creative housing options for its poorest? And if the East End can't afford to house the poor, how will far richer London boroughs with far higher rents manage?
New reality"This is the terrifying reality of our housing crisis today," said Shelter boss Campbell Robb. "Hundreds of families potentially forced to move halfway across the country, uprooted from schools, support networks and employment opportunities."
He added: "Taking families away from their support networks at the time when they need them most is not going to help them back on their feet. The government must ensure that councils look out for homeless families' best interests when making difficult decisions about where to house people."