The National Housing Federation has said Newham's plans to relocate tenants out of London "is a desperate move which demonstrates the scale of the housing crisis".
It urged the Government and the London Mayor to take urgent action.
Newham Council has said it needs to move some of its poorer tenants out of London, because of the housing benefits cap. It has written to housing associations across the country to find accommodation. Newham says rising rents in London mean it cannot afford to pay for private rented homes.
It claims that families moving from richer areas in the capital have pushed the rents up, leaving no spaces for local people. However, the government accused Newham of "playing politics" and said affordable housing was available.