The Home Office looks set to restore millions of pounds of funding stripped from Croydon for the care of child asylum-seekers after protests from the council and MPs.

Immigration Minister James Brokenshire a cross-party delegation of politicians on Wednesday to discuss concerns about a £4m cut to Croydon Council's budget for looking after hundreds of children from overseas.

The Government pays Croydon, Kent and Hillingdon - the three "gateway" council with the highest asylum-seeker populations - a sum of money per day for each unaccompanied young person in their care.

In July it cut the payments by a fifth despite a worsening refugee crisis and a 21 per cent increase in the number of child asylum-seekers in Croydon's care.

RELATED: Home Office cuts Croydon's asylum-seeker funding by £4m amid refugee crisis

MAPPED: Where Croydon's child asylum-seekers have fled from

Council leader Tony Newman, who was joined by Conservative Croydon MPs Gavin Barwell and Chris Philp at Wednesday's meeting, said talks with the Immigration Minister had been "very positive".

He said: "I'm quietly optimistic that we're going to get to a better place and actually a long-term understanding with the Home Office in terms of the pressures on Croydon as a gateway authority.

"We've had a genuinely good discussion and they've very much taken on board the points we've made. I now await to see the detailed response."

Mr Brokenshire is to write to Coun Newman in the next few days with a formal reply his concerns about the funding cut, the subject of cross-party condemnation from all 70 of Croydon's councillors at Monday's full council meeting.

Mr Philp, MP for Croydon South, said he expected the letter to contain "good news". 

He added: "From what [the minister] said in the meeting it sounds like this cut is going to be completely or substantially reversed. Until that letter arrives we can't be certain, but it sounds very positive."

Croydon Council currently looks after 452 unaccompanied asylum-seeking children, who account for more than half of the young people in the authority's care.

The figure is higher than all UK councils except Kent because the country's only asylum-screening unit is located in Croydon at Lunar House.

The funding the council receives, which varies depending on the child's age, was cut from between £114 and £137.50 per day for each child to between £91 and £114.

Last month Coun Newman described the cut as "completely unacceptable" and called on the Government to "do the right thing" and restore it.

A Home Office spokesman said today: "We are aware of the council’s concerns about funding and the Immigration Minister met Tony Newman, the leader of Croydon Council, on Wednesday morning to discuss the issue."