Benevolent sanctuary for homeless faces grim future: Man and beast are welcome at a former London mission now run as a hostel. At least, until government funding cuts arrive. Marianne Macdonald reports

HIGH above the scurry of commuters at Old Street roundabout in central London sits the red brick pile of the Leysian Mission.

Built in the era of Empire in days of abundant marble and testaments to battle dead, its innards are now coated with linoleum and its faded glory houses the homeless. But despite the building's stern religious origins, St Mungo's Association runs this popular mixed hostel on City Road with an unusually benevolent hand.

It is tailored to what people sleeping rough in the Bullring, Waterloo, said they wanted when it opened 18 months ago: it accepts dogs, offers single rooms and expels violent drunks.

Yet it is due to close early next year when the Government stops funding for more than one-third of London's hostels for the homeless. This could jeopardise the future of its 45 residents. The closure results from the pounds 10m cut in government funding for the Sleeping Rough Initiative over the next three years: pounds 86m, compared with the pounds 96m given over the last three. Most of the cuts are being made by stopping funding to emergency shelters. The Government said this week cash would be redirected to permanent 'move-on' housing.

David Palmer, 20, from Essex, came to the City Road hostel after the owner of a Ford Granada found him squatting in it. He says he would not have come if the hostel had refused his cross- bred dog, Suzie.

Food is good and dinner only costs pounds 1. Apart from the dog rota (residents with hounds must patrol the corridors with a poop-a- scoop, bucket and mop) David spends time playing snooker, watching TV and playing tapes in his large room overlooking the roundabout. Dog food comes cheap from a butcher who gives him offcuts, and he can safely house his treasures: a Zippo lighter and stereo.

Dave Phillips, 24, speaks in a lilting Welsh accent. His journey to City Road began after the death of his grandmother in the Rhondda Valley. He now lavishes love on Sam, a terrier blinded by cataracts.

He likes the institutional charm of St Mungo's well enough. When it is cold, he can huddle under the duvet in his room, which is better than sleeping in a ripped tent in Lincoln's Inn Fields. Soon he will get a housing association flat; until then he likes the staff, most of whom do not patronise him. 'This is by far the best hostel I've been to,' he says. Most importantly, it would take his dog.

The hostel management is liberal; staff turn a blind eye to sex; give residents their own room and key; impose no curfew and tolerate swearing.

Mick Carroll, the housing association's press officer, said: 'We don't throw people out during the day, we don't stop them coming in at night, we don't evangelise or make them break rocks in the back garden on a spike as some did in the past.

'Every year we turn away 3,000 people from the doors of our 50 London hostels for the homeless. We certainly don't want any of them to close.'

(Photograph omitted)