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The principle trade body representing housebuilders is taking legal advice following a public threat by Michael Gove to stop them from trading if they don鈥檛 pay into a 拢4bn fund to help leaseholders hit by the fire safety crisis.

The Home Builders Federation made the admission in a statement in which it accused the government of not working 鈥渃onstructively鈥� to find a solution to the crisis, and instead hurling 鈥渃learly not proportionate鈥� threats against the industry.

The statement from UK housebuilders, issued late on Friday, follows the unexpected publication the night before of an from the Department for Levelling Up, Housing and Communities (DLUHC) to all UK housebuilders with annual profit of more than 拢10m, calling on them to sign a heads of terms agreeing to pay the 拢4bn levy.

The letter, signed by Richard Goodman, director general of safer and greener buildings at DLUHC, says housebuilders will only receive government services and support on 鈥渇inancing, procurement, planning, building control, housing investment, and industry development and leadership鈥� if they sign up to the commitment.

It adds that: 鈥淭he Secretary of State has made clear he is willing to explore taking further steps to ensure the only participants in this market are those who have committed to resolving this crisis.鈥�

The move follows Michael Gove鈥檚 decision last month to force housebuilders and product manufacturers to pay up to 拢4bn into a fund to pay for repair works to mid-rise buildings affected by the fire safety crisis.

The industry had responded by saying it supported protecting leaseholders from any costs of repair work and would work with the government on the measure, but questioned the 拢4bn figure and said the payment should be expanded to cover overseas developers.

But one senior industry figure said, on condition of anonymity, that the latest move by government was 鈥渜uasi-Marxist鈥� and legally 鈥渧ery questionable鈥�.

Another said the requirement to sign up to a potentially limitless levy, on pain of having your business shut down was 鈥渆xtraordinary鈥� and will have hardened industry chiefs against contributing to the fund. 鈥淭he industry was very much listening to the government on this,鈥� he said. 鈥淏ut this completely de-rails that.鈥�

The industry says it has already set aside 拢1bn to pay for repair works and is due to pay at least 拢2bn into a new tax designed to cover work on high-rise homes with problems over the next 10 years.

A spokesperson for the HBF said in a statement: 鈥淭hroughout this process so far the industry has engaged constructively with government to find solutions and remove the burden of costs to remediate buildings from leaseholders. It is clear from today鈥檚 open letter that government is not taking the same approach.

鈥淭he latest proposal, an open-ended and variable annual tax on UK home builders at a rate decided by a government department each year, under the threat of being unable to operate in the UK, is clearly not proportionate. We are considering our position on the legality of the proposals鈥�.

The HBF also hinted that the government鈥檚 approach failed to recognise the government鈥檚 own culpability for the fire safety crisis, through having set the regulatory framework under which all the buildings now needing to be repaired were approved.

鈥淎s the Grenfell Inquiry is shortly to consider, government also needs to recognise the failings of its 好色先生TV Regulations regime on which the industry has relied.

鈥淲e will continue to discuss the matter with government in a reasonable and rational way and hope that will be reciprocated.鈥�

Gove has said he wants to conclude a deal with the housebuilding industry by Easter, a timetable described last week by the HBF as 鈥渆xtremely challenging鈥�.

Last week鈥檚 open letter also made clear the government wants to be able to issue a press statement at some point this month hailing a number of early-adopting housebuilders who have signed up to the government鈥檚 heads of terms.

Beyond paying in to the government鈥檚 remediation fund, the letter stated it expects developers to also pay for all the remediation work necessary on any buildings constructed by them in the last 30 years, provide detailed data returns, and ensure senior officers in companies are checked as being 鈥渇it and proper persons to undertake major scale development鈥�.