The return to the traumatic family break-ups exposed in the 1960s play Cathy Come Home follows a high court ruling last May. Housing experts warn that some children face Christmas in care.
Russell Campbell, chief solicitor at Shelter, said: 'We've been dealt with a string of cases across the country in the last three months where social services are telling homeless families their children should be taken away and fostered or placed in local authority care.
'Councils are saying the only service they are obliged to provide is care for the children'.
The Children Act 1989 puts the needs of children above all considerations in offering council services and was invoked regularly by homeless families to secure accomodation. However, this use was successfully challenged in court by the London boroughs of Lambeth and Barnet, which are both short of accomodation for homeless families.
The housing crisis has worsened in the past 20 years as millions of council homes sold off were not replaced. Councils built 105,000 homes in England in 1975, but only 110 last year. About 17,000 homes were built last year by housing associations.
Mr Campbell commented: 'Until now the Children Act provided a safety net for our most disadvantaged families. The recent court cases have taken that away. The housing crisis arises from a desparate shortage of family accomodation, but breaking familires up isn't the way to deal with it.
'we will challenge individual cases where we can. As things stand, it's now only a matter of time before family members will be separated'.