What the changes would do

The asylum system changes at the centre of the dispute were announced by Mahmood last November. They end permanent leave to remain and bring to a close the government's duty to support people who would otherwise become destitute. The home secretary argued her proposals would restore order to the immigration system and help puncture the appeal of hard-right parties such as Reform UK.

• •End of permanent leave to remain for those in the asylum system
• •Removal of the duty to support people who would otherwise become destitute
• •A stated aim of restoring order to immigration and blunting hard-right parties such as Reform UK

The withheld assessment

According to sources, Mahmood has repeatedly declined to say how much she expects homelessness to rise as a result of the asylum system changes. A person with knowledge of the standoff said she was asked on multiple occasions what the Home Office assessment was of the impact on homelessness and community cohesion, and refused to engage. The refusal has, the source said, caused a huge amount of frustration among ministers working on the government's push to end rough sleeping.

Her allies reject the criticism. They say the exact impact of the proposals cannot be quantified because the detail has not yet been finalised, and insist the new system will be designed to minimise destitution and homelessness.

The first requests came from Ali McGovern and Miatta Fahnbulleh when they were ministers under Keir Starmer, backed by then housing secretary Steve Reed. The three feared that moving asylum seekers out of hotels could increase street sleeping and prevent the government hitting its target of halving rough sleeping by the end of the parliament.

McGovern and Fahnbulleh met Alex Norris, then a Home Office minister and now justice secretary, but felt few questions were answered. A formal letter was never sent, sources said, after Fahnbulleh resigned - a move that helped bring about Starmer's departure.

A Home Office impact assessment published this month admitted homelessness could rise, warning that repayments could cause financial hardship or destitution. It said this may increase demand for homelessness services and rough sleeping support, creating additional cost pressures for local authorities.

But the assessment also states that the scale of the risk cannot be assessed, because the design of the recoupment mechanism has not yet been developed. An ally of Mahmood pointed to the same document, which says thresholds and repayment rates will be designed to ensure individuals retain sufficient income to meet basic living standards.

A Home Office spokesperson defended the handling of the policy:

The spokesperson added that ending asylum hotels will not leave people homeless, and that reforms have already saved taxpayers more than £1bn since the election.

The wider cabinet row

Ministers say the standoff has deepened since Andy Burnham became prime minister. Burnham has promised every rough sleeper a route off the streets by Christmas, committing hundreds of millions of pounds.

Angela Rayner, now housing secretary, wants more details and, sources say, fears that moving asylum seekers out of hotels and into houses of multiple occupancy will reignite anti-immigration protests. She has also argued the government should exempt care workers from plans to make it harder for workers to achieve settled status.

Earlier this year, the Guardian reported that Burnham was considering intervening to make sure care workers were exempted and prevent a sudden exodus from the sector. A government source said the prime minister wants ministers to deal with the detail of the policy, but has made clear he supports Mahmood while also wanting sectors to get the support they need.

Home Office ministers will meet their counterparts from other departments over the next few days to seek a compromise, amid warnings of a care sector staff crisis. The issue is set to be decided over the next 10 days after a series of meetings between senior ministers.