Government scraps plans for £15m asylum camp

She said: "We are very conscious of the need to ensure best value for the taxpayer and progressing the site would have taken significant time and further remediation and operational costs."

The NAO report said the presence of asbestos was known about before the sale was completed, with the estimated cost of repairs at more than £20m.

The letter, dated 9 December, said "steps will be taken to ensure that the onward sale of the site is carried out appropriately, and the correct market value is reflected".

Speaking at a public accounts committee on Monday, Home Office permanent secretary Sir Matthew Rycroft confirmed that the site was no longer needed.

He said: "Ministers decided only last week that we no longer needed it in the Home Office, either for detained or non-detained accommodation.

"So we will be working with our colleagues to see if it would be suitable for any other part of government and, if not, then we will be selling it."

Dr Kieran Mullan, the Conservative MP for Bexhill and Battle, welcomed the decision.

"I want to thank campaigners and cross-party councillors across all layers of local government for fighting against this plan," he said.

"I've done all I can to support them. I am especially pleased for the residents of the Northeye Estate for whom the uncertainty and worry is over."