Plans for thousands of affordable homes face being scrapped as billions of pounds are diverted to fixing the building safety crisis, builders have said.

Clarion Housing Group, the UK’s largest provider of affordable housing, has told the Guardian it is on course to build 1,800 fewer affordable properties over the next five years as a result of the crisis. Another large provider, which asked not to be named, said it would build 2,000 fewer in the next 10 years – a 15% drop – because of the crisis. The largest providers of cheaper housing in London have also estimated they will need to spend GBP3.6bn on post-Grenfell repairs in the next 14 years, an amount which could provide more than 70,000 new homes.

The impact of the cost of replacing combustible cladding and correcting other fire safety defects discovered on thousands of homes in recent years is being raised with Michael Gove, the secretary of state for levelling up, housing and communities, who is under pressure to find a solution to the widening crisis. The chancellor, Rishi Sunak, is also facing calls to significantly extend the current GBP5bn building safety fund in the spending review on 27 October.

“Housing associations across the country are redirecting spending towards fire remedial works and away from building new affordable housing,” said Rob Lane, chief property officer at Clarion. “We estimate we will build 1,800 fewer affordable homes over the next five years as a result of remediation costs.”

Private leaseholders are also facing more and more crippling bills from developers and freeholders to fix fire safety defects in flats not covered by the government’s GBP5bn building safety fund, which applies to buildings over 18 metres in height with combustible cladding.

Last week, Emilie Boswell, 26, was among leaseholders in a block in Leeds who received a bill for GBP101,267 each for the remediation of their external walls. The building is over 18 metres in height and so may yet qualify for government funding.

Leaseholders in a block in Salford also revealed how an earlier decision by the government to fund all of their repair works was reversed because not all of the works were covered by its building safety fund, leaving them with bills of GBP20,000 each.

Many building owners and developers are rejecting calls from ministers to fund works which run into millions of pounds per building. Labour and a coalition of Conservative backbench rebels are set to table amendments to the building safety bill which is due to pass through the Commons in the coming session. They want ministers to protect leaseholders against building safety costs which are not their fault.

The warnings about the impact on the building of affordable houses come amid a chronic shortage of cheaper homes. In the first half of this year housing associations and councils built only 16,000 homes, while private companies built 72,000. Councils last week warned that waiting lists for affordable housing could double next year to as many as 2.1 million households in part because of the cost-of-living crisis driving up rent arrears and evictions.

Lane said: “We are making strong progress in our building safety programme and are doing all we can to protect our leaseholders from associated costs but broadening the financial support available would significantly ease the burden and would allow housing associations to redeploy their budgets and scale up delivery of desperately needed new homes.”

Thousands of new affordable and social homes for those most in need could no longer be built because of the crisis, said Kate Henderson, the chief executive of the National Housing Federation.

“Housing associations across the country are working hard to make their buildings safe as quickly as possible,” she said. “However the lack of government funding to remediate social housing buildings means that these not-for-profit organisations are forced to divert in excess of GBP10bn away from the people they exist to support. It is not right that the poorest people in this country are made to suffer whilst those who created this crisis – for-profit developers who built these homes, and manufacturers of dangerous cladding – are not responsible for these costs.”

She said: “We urge the government to fund the full upfront costs of making buildings safe and claim this money back from those responsible once work is complete.”

The government insists building owners should not pass on the costs of defects, but pay or recover them from the developers or builders responsible. It says this has happened in half of cases where private high-rise blocks were found with similar aluminium composite cladding to Grenfell.

A spokesperson for the Department for Levelling Up, Housing and Communities said: “We have committed over GBP5bn to remove unsafe cladding and we are focused on completing this work to make homes safe. We are also helping more people get on the housing ladder in an affordable way. Last year, we delivered 243,000 new homes and we are investing GBP12bn to help councils and housing associations provide affordable housing.”