The scheme mirrors a similar one for social housing, which caps the amount social housing tenants have to pay for repairs work through service charges at £15,000 within London and £10,000 outside.

Peter Hardy, Partner and Co-Head of Housing at Addleshaw Goddard, criticised the move and said it could leave leaseholders in dangerous buildings for longer than necessary.

Mr Hardy said: “What has been proposed is incredibly unfair to leaseholders and will in many cases further delay the removal of unsafe cladding due to the time spent identifying a developer and investigating their finances.

“It seems reasonable that if a builder cannot be found, the government should make the payment and not leave leaseholders with yet more years of uncertainty and worry.”

The U-turn comes amid a wider crackdown on the housing sector, including new tax threats to uncooperative developers and blocking access to planning permission.

Mr Gove wants the power to block planning permission for developers who fail to do enough to cover the costs of updating cladding which does not meet fire safety standards.

The move is the latest attempt to strong-arm developers who have not upgraded buildings that fall below the required standards in the wake of the Grenfell Tower fire tragedy.

Courts will also be given powers to stop developers using shell companies, according to Mr Gove.

According to a government statement, developers will see financial consequences for not actively supporting government efforts.

It said: “The Government hopes to not have to use these powers; it wants responsible developers and manufacturers to operate freely and with confidence, to help deliver the homes people need. If they do not act responsibly, they must face commercial and financial consequences.”

Further pressure on manufacturers is also being applied by Mr Gove, following meetings with the sector last month.

As part of the new pledges, cost construction orders will be able to be placed on manufacturers successfully prosecuted under product regulations, making the company liable to pay remediation.

Building owners and landlords will also be able to take legal action against manufacturers who used defective products on houses found to be unfit for habitation for houses built in the last thirty years.

Mr Gove said firms responsible for cladding issues shouldn’t profit while those afflicted continued to struggle.

The Levelling Up Secretary said: “These measures will stop building owners passing all costs on to leaseholders and make sure any repairs are proportionate and necessary for their safety.

“All industry must play a part, instead of continuing to profit whilst hardworking families struggle.

“We cannot allow those who do not take building safety seriously to build homes in the future, and for those not willing to play their part they must face consequences.”

The National Housebuilders Federation were approached for comment.