A decision is imminent on the future of the Scrine Foundation.

The homeless charity is in a wrangle with the city council over the payment of housing benefit which theatens the way it operates and could result in 130 people ending up on the streets.

Council spokesman, Glynis Alexander said the authority’s decision was “imminent”.

She added: “We have devised a rescue package which would ensure no one becomes homeless and also goes a considerable way to ensuring Scrine’s future viability as a voluntary organisation helping homeless people.

“This proposal requires the co-operation of Scrine, its tenants, and associated private sector landlords, and it is therefore important that we have the opportunity to discuss it with them first.”

Meanwhile the Bishop of Dover has thrown his support behind the Scrine Foundation.

In a letter to city councillors, the Right Rev Dr Stephen Venner said he was “deeply concerned” about the issue and urged members to take an independent assessment of the costs and impact of the proposals before making a final decision.

He added: “Many of us are distressed when we find people sleeping rough and in need in our city. Before we risk increasing their number, let us have an independent evaluation and see how far the Scrine Foundation can offer a cost effective solution to managing the multiple needs of some very dependant people.”

Many of the charity’s clients are receiving hundreds of pounds a week in housing benefit which also covers a raft of support services.

But the council wants to cut payments to the flat rate of £65.77, leaving the charity in financial crisis.