The town hall could take Mayor of London Boris Johnson to court over plans to set rents in Islington so high they could cause “social cleansing” .

On Tuesday, London Assembly members at the City Hall gave the nod to the proposal to cap so-called ‘affordable’ rents at 80 per cent of market value, part of the Mayor’s Plan for the capital.

But critics say this could price thousands of families out of high-rent inner city London areas and local authorities are best equipped to set the rents in their own area.

And Islington Council, which has taken a very public stance against the 80 per cent figure since it was first discussed in 2011, is now considering a legal challenge to the decision.

James Murray, Islington Council’s executive member for housing, said: “The Mayor of London is trying to impose this on us – which is why we’re fighting to keep rents at the level of social rent that is genuinely affordable for people in Islington.

“Whilst we’re disappointed that the Tories in the London Assembly sided with the Mayor against local councils, we will continue to defend our position. We have a firm local planning policy that supports social rent, and we’ll be pushing the detail of the Mayor’s position, including looking at options for a legal challenge with other boroughs.

“Our fight for social rented housing – homes that are genuinely affordable for people on low incomes – is vital for Islington and we will not let it drop.”

People who live in Sutton Dwellings, on the town hall’s doorstep in Upper Street, are already feeling the pinch from rent hikes and have organised a protest against them.

Tony Philip , general secretary of the Sutton Dwellings Tenants Association (STAIR), said: “People are very concerned. Over the past two years rents have increased by 18 to 20 per cent.

“They are trying to implement target rents of 80 per cent and it’s going to force people out. No one wants to leave; people have been here 10, 20, even 50 years.

“One tenant with more than 30 years residence was moved on medical grounds to a ground floor flat. They increased his rent from £130 per week to £285 and its a smaller property.

“The landlords are being greedy – they are behaving like sharks really.”

STAIR are holding a meeting at Islington Town Hall on September 11 at 6.30pm to oppose the rent increases.