A lifelong Camden family forced to live in just one room faces being pushed out of the borough in their search for a bigger home.

Mother Katerina Spencer, 46, has shared a one-room flat with her son Nicolas, 15, and daughter Grace, five, in a council-run hostel in England’s Lane, Belsize Park, since 2010.

But with too few housing points to bid for a larger Camden council house and the government’s benefit cap making a private property unaffordable, Ms Spencer has been told she must leave Camden if she wishes to find a bigger home.

She said: “If I move out of the borough, I’d be isolated. I was told by the council that they would refuse responsibility for me if I refused to move out of the borough. Either I move or go out on the streets with the kids.”

In the last few months, Ms Spencer has been offered a temporary three-bedroom flat in Brent in north west London by Camden Council - but rejected the offer.

Originally, Ms Spencer found herself homeless after breaking up with the father of her youngest daughter and moving back to Camden from Ireland where they had been living together.

She spent periods living with family members before being housed in the England’s Lane hostel.

In the hostel room, the mother-of-three shares a bunk bed with her daughter, a pupil at St Paul’s CoE Primary School in Elsworthy Road, Primrose Hill.

Her son, a pupil at Haverstock School, who is preparing to sit his GCSEs this summer, sleeps above his mother and sister.

Since the birth of her daughter, Ms Spencer has battled depression and alcoholism as well as struggling to find a permanent home.

She is currently unemployed but has enrolled in training schemes and hopes to work for her eldest daughter, who is setting up a construction business.

But she fears being forced to move away from Camden would destroy all the progress she is making.

“I’m embedded with a number of services in Camden, such as alcohol support and my GP. I would lose all my support network.

“It would affect my depression and I may start drinking again. I would feel totally lost – panic attacks would start up.

“Everything would collapse around me. We are in limbo, we don’t know what is going to happen,” she said.

A Camden Council spokesman said: “When people present themselves as homeless, we follow our duty to make reasonable offers of accommodation. We also work closely with them to find properties that are suitable to their needs.

“In this case, Ms Spencer has asked to remain at England’s Lane Hostel until we can find a suitable property in Camden.

“The government’s welfare reforms have restricted options for many people in central London. We are working closely with our residents to support them through these changes.”