A project to regenerate parts of Hull and rehouse people has come to a halt after central government withdrew funding.
The Gateway scheme had been running since 2004 and had channelled £150m of government funds into new homes and neighbourhoods.
More than 140 families have had to cancel moves to new homes following the announcement.
It is feared 30 council staff and two regeneration teams may lose their jobs.
City officials had been aiming to attract about £30m in 2011/12 to keep the programme going.
So far the scheme has overseen the demolition of 1,000 unfit properties in the city and 800 households have been relocated.
Hull City Council said it was "doing everything possible to secure alternative funding through the Homes and Communities Agency and other partners".
Some residents on Hawthorn Avenue, west Hull and Battersea and Hammersmith Close at Ings - 143 households in total - have been told the council is pulling out of the deal.
Hull East MP Karl Turner questioned the prime minister, David Cameron, in the House of Commons at Prime Minister's Questions on Wednesday about the withdrawal of funding.
Mr Turner said: "I've been inundated with constituents over the past few days who are desperate, living in properties surrounded by properties that are boarded up.
"I'm seeing them tomorrow night at a residents' meeting, what message of hope can I give them?"
Mr Cameron said: "I think there are schemes like the regional growth fund that his constituency can apply for to help to deal with issues like improving the level of housing.
"That is one of the schemes that we have, we also have a huge programme for upgrading and building new homes through the new rent scheme that we have.
"All of these can make a difference and he can talk to his constituents about those."