'Since the very beginning, the approach by the Government to try to regulate caged home operations has been wrong. What we're lobbying for is not a bill, but action by the Government to accommodate them.' Assistant Secretary for Home Affairs Vincent Tang Chi-leung dismissed the worries as 'hypothetical' and reiterated a promise by Secretary for Home Affairs Michael Suen Ming-yeung that 'not one of the cage people would end up living in the street'.

SOCO has contacted 50 home operators and most of them said it would cost them hundreds of thousands of dollars to renovate their apartments to get operating licences, which they could not afford.

Mr Tang confirmed that the Government was not planning to subsidise renovation works. But he did not address the fact that some operators were considering closing down the homes.

'Under current legislation, landlords can only drive out their tenants when they're not paying the rent, or when the premises are redeveloped,' he said.

'The Government's stand is to give the cage people a place which satisfies basic fire safety and hygiene standards, not to get rid of the homes, which we see as having a social value. The lower income group need this option of housing which they can afford.' The Home Affairs Branch estimates that there are 3,200 cage people living in 145 homes in old areas like Shamshuipo and Mongkok.

SOCO believes the population is much under-estimated. The Housing Authority estimates about 10,000 people are living in cage conditions.

Operators have until November to register their businesses and will have a two-year grace period for the upgrading. Twenty per cent have registered.