House builders in England have been told they must agree to fund the replacement of unsafe cladding on mid-rise blocks in the wake of the Grenfell Tower fire.

Michael Gove, Secretary of State for Levelling Up, Housing and Communities has urged builders to sign up to a funding plan to remediate dangerous cladding on blocks between 11 and 18 metres by March or face government sanctions.

An estimated £4 billion is required to fix dangerous cladding found on mid-rise blocks following the deadly Grenfell Tower fire in June 2017. The move means that this cost will not be paid by leaseholders.

In his letter to the sector, Mr Gove threatened housebuilders with being shut out of public contracts and funding, subjected to planning powers or pursued through the courts if they do not agree to “a clear, fully-funded plan of action”.

“I am sure you are as committed as I am to fixing a broken system,” he wrote. “I want to work with you to deliver the programme I have set out.”

“But I must be clear, I am prepared to take all steps necessary to make this happen, including restricting access to government funding and future procurements, the use of planning powers, the pursuit of companies through the courts and – if the industry fails to take responsibility in the way that I have set out – the imposition of a solution in law if needs be,” he continued.

The government said it expects firms with annual profits from housebuilding of £10 million to contribute to the fund, but will make a final decision once talks with housebuilders have concluded.

That would cover significantly more developers than were subject to a levy brought in to raise £2 billion to soften the blow of cladding funding, which applies to around 30 companies with profits above £25 million.