Housing campaigners and MPs have cautiously welcomed plans to pressure developers to cover the cost of removing dangerous cladding from buildings taller than 11 metres, but warned they do not go far enough. In an apparent climbdown, the housing secretary Michael Gove is expected to announce that leaseholders in buildings between 11 and 18 metres (36-60ft) tall will no longer have to take out loans to cover costs. Instead, Gove will try to make developers pay £4bn, according to a leaked Treasury letter reported by BBC Newsnight. Under rules introduced in England after the Grenfell Tower fire killed 72 people in 2017, only leaseholders in buildings of more than 18 metres can access grants to replace unsafe cladding. However, excitement will be tempered as the Treasury letter that states approval for funding applies only to fixing cladding. That means leaseholders who are facing bills for defective fire compartmentation, fire doors and other non-cladding faults still face bills and uncertainty over whether mortgage companies will lend against their homes so they are sellable. Also, there is no new money. The £4bn may all come from existing housing department budgets, according to the letter. In addition, it only threatens a tax on developers or legal action – both of which have been largely unsuccessful in getting developers to pay to fix defective buildings so far. Giles Grover, the co-leader of the End Our Cladding Scandal campaign, said it was “another step in the right direction” but that they needed to see the detail as well as action on the ground. “You can talk about extra funding and positive steps but it’s taking so long to make the buildings safe.” He also called for legal protection for leaseholders. “We need legislation to protect us, that’s how we’ll get certainty.” Grover said his group was meeting Gove on Monday morning when he said they would “see what he has to say”. He said that in Gove’s short time in the role he had done considerably more than his predecessor Robert Jenrick, but warned: “Still we need to see the money on the ground getting out.” Another campaign spokesperson, Paul Afshar, said he welcomed the news but said the “devil’s in the detail”. “Obviously it’s welcome news. I myself live in a building that’s under 18 metres and previously there was nothing in place in terms of financial support … I’m cautiously optimistic about it. We need to see the exact detail on it in terms of the scope of what it’s going to cover and how much money is going to be put aside.” Steph Pike, a lawyer, leaseholder and campaigner, tweeted: “This is another announcement with no real substance. How is Gove going to ‘make developers pay’ without legislating for it? What about non-cladding fire safety defects? Who pays for them? More spin. More words. No real action.” The leaked letter to Gove, from chief secretary to the Treasury, Simon Clarke, said loans for smaller buildings would be replaced by a “limited grant scheme”. “You may use a high-level ‘threat’ of tax or legal solutions in discussions with developers as a means to obtaining voluntary contributions from them,” it read. “I am pleased to see that you acknowledge the principle that the taxpayer should not be on the hook for further costs of remediation. To reiterate, my approval of this new package for 11-18m buildings is therefore conditional on no further exchequer funding.” Peter Bottomley, a senior Conservative MP and co-chair of the all-party parliamentary group on leasehold and commonhold reform, urged the government to go further. “From what we’re hearing, progress is being made – it’s not enough,” he told BBC Radio 4’s Today programme. “We need to get the money, spend it properly, and we need to overcome the hurdle” of indemnity funding so landlords can make claims from developers and manufacturers, he said. The government must tell insurance companies to “come to the table with, say, £8bn and then innocent leaseholders will live in homes which are safe and saleable”. Matthew Pennycook, Labour’s shadow housing minister, said: “Any new measures that help resolve the building safety crisis are welcome, but on the face of it these appear far less significant than they sound. “Nothing on non-cladding defects, no new developer levy and the position on leaseholder liability unchanged. We await further detail.” An announcement on the measures is expected on Monday. A department for levelling up, housing and communities spokesperson said: “We would not comment on speculation.”