Refugee settlement agency COA is to appeal against a recent court ruling which will force it to pay compensation of €50,000 a day if too many asylum seekers stay at the Ter Apel reception centre.

Judges ruled at the end of October that the total number of refugees at the centre may not be more than 2,000 at any time of the day, after the agency began bussing people to emergency centres, including tents, at night.

The agency says the fine, which is payable to the local authority that includes Ter Apel, will not solve the overcrowding problem or encourage its staff to work any harder. “But it will force COA to pay unnecessary and preventable costs,” the organisation said.

Meanwhile, COA officials told MPs on Wednesday morning that the current government’s policies are making it more difficult and more expensive to find places for asylum seekers to live.

The right-wing cabinet wants to scrap legislation ensuring that all local authorities provide housing for a fair share of the refugee total, and to remove responsibility for housing refugees who have been given residency permits from local councils.

This is forcing the agency to turn to emergency solutions, such as hotels and holiday parks, which in turn is pushing up costs, officials said. Regular accommodation costs an average of €30,400 per year, but emergency housing costs almost €70,000 per person.