A €20m contract to build modular homes in Dublin has been pulled by the City Council, due to lack of interest.

Authorities say there were insufficient applications to build the prefab-style houses which were seen as a temporary solution to the homeless crisis.

At their launch last September the Council revealed sample units and said 150 homes could be in place in four months under a new fast-track procurement process.

A development of 22 prefabs, which were due to be open in Ballymun before Christmas, should be ready next week, while a tender will be reissued to find a builder for the other 131.

However homeless campaigner Father Peter Mc Verry doesn't hold out much hope: “I’m very surprised to be honest, I’m very disappointed for those families who could have swapped a hotel bedroom for a lovely modular home.

“Six, nine months ago when these homes were on display, there was great interest from the contractors, one of them told me he could produce ten of these modular homes every day and he could have them on site two days later.

“Providing them now is going to be just as slow as building houses.”