Up to a third of landlords advertising apartments on the internet now state that "rent allowance will not be accepted". The allowance or supplement is worth a maximum of 120 a week and is given to over 60,000, mainly single, social welfare recipients who cannot afford to pay for their own accommodation.

Minister Brennan said that he was "very concerned" that so many landlords refused to rent to people just because they were on social welfare.

Brennan said that while the practice is not illegal, he will now investigate whether this is preventing people on low incomes from finding the accommodation they urgently need.

If this turns out to be the case, Brennan warned the landlords that he will introduce legislation outlawing the practice. The minister also expressed surprise that in a time when rents are falling, so many landlords are turning their back on guaranteed rental income worth 370m a year, which represents 40% of the private rental market.

But Threshold, the housing pressure group, blamed Brennan for what it agreed was a fairly widespread practice.

The most recent survey by Threshold on suitable accommodation available for those on low incomes showed that of 370 bedsits available in Dublin, 146 charged rents at or below the 120 per week cap. "But of these 146 bedsits, just 35 would accept rent supplement, " said the Threshold spokesman.

He criticised the department for delays in paying the deposit for a flat and for paying the rent a month behind and not a month in advance as required by most landlords. "This means that a landlord is handing over the keys of his flat to someone he doesn't know without getting any money for up to a month. This is not a very attractive option for landlords, " he said.

But he said that some landlords have told Threshold that they don't like renting to social welfare recipients because as they are at home all day they increase the wear and tear on the flat.

The spokesman also called on the department to raise the 120-a-week cap on the supplement, which is around 30 a week short of the cost of a bedsit in Dublin.