Mum-of-two Samantha Thompson, 25, in one of her bedrooms, where the celing has been removed

A legal dispute has erupted over a multi-million pound council housing development that is plagued with problems just months after the first occupants moved in.

The new flats were built on the ground floor of Otley House

Tenants living in brand new flats in Otley House, Finsbury Park, have been forced to sleep on living room floors because there is so much water pouring in through their bedroom ceilings.

One young mother-of-two says the leaks are causing such stress that her doctor has upped her medication for epilepsy.

Eighteen flats are affected, all of which were built in place of a row of derelict garages in St Thomas’s Road, as part of a flagship housing scheme that cost Islington Council £2.4million and was completed last summer.

Now the council is locked in a legal dispute with the company that carried out the work over who has to pay for repairs.

Samantha Thompson, 25, who lives with her partner and two young children, said: “We moved in September and within four weeks, water was coming into the bedrooms. It still hasn’t been fixed.

“The ceiling has been taken down in one of the bedrooms and it is completely out of action. Me and my partner are sleeping in the front room. You don’t expect to get these problems in a brand new flat.”

She added: “It’s taking its toll on me. I’m epileptic and they’ve upped my medication because of all the stress.”

Many of the flats are riddled with damp and have buckets to catch the drips dotted around the place.

Student Roma Ahmed, 19, who lives with her disabled mother, said: “It’s been leaking ever since we moved in, on the first day. That was in July. One of the bedrooms is so bad we can’t use it and I’m sleeping on the floor.”

Linda Kancevica, 25, who moved into her flat in October, said: “It’s taking them too long to sort it out. The council is arguing with the previous contractor – everyone is trying to blame someone else.”

The firm original contractor went bust during the build and the job was handed to a second firm.

Cllr Terry Stacy, leader of the Lib Dem opposition on Islington Council, said: “The fact the first contractor went bust is no excuse. I feel for these residents, having their wonderful new homes being spoilt because of incompetence.”

A spokesman for Islington Council said: “We apologise for any inconvenience to residents. Water leaks have been traced to windows on the floor above, which are being replaced as fast as possible.

“Affected residents are being offered compensation for any loss and redecoration but none has taken up our offer of rehousing. The council fully expects to recover its costs.”