Residents have been evacuated from bungalows at Knipe Point after their rear gardens disappeared down the cliff face, which looks out on to Cayton Bay.

Huge cracks have begun to form in woodland below the private residential area and large pools of water are visible creating bogs in some of the surrounding land.

The public footpath which runs near to Knipe Point has now been cordoned off by the National Trust which owns the surrounding land.

The landslip bears similarities to that of the Holbeck Hall drama in 1993, when the hotel in South Cliff collapsed down the cliff face within days.

The Evening News established yesterday that the cliff edge has receded by as much as 20ft over winter.

It is yet to be seen whether the £150,000 homes are covered by their insurance policies.

A Knipe Point resident, who did not wish to be named, said: "It is worse than anyone says.

"The landslip near to those houses is very recent.

"Their land and gardens have disappeared.

"It is now right up to the wall of their houses. Those houses will definitely have to be pulled down."

The cause of the landslide is still not known but it is believed it is a drainage issue rather than coastal erosion.

He said he was not sure if the insurance companies would pay out on a claim such as this.

Residents of the two homes worse effected by the collapse had been evacuated just a couple of months ago.

Other residents, who own some of the £150,000 properties, were not prepared to speak to the Evening News, but did say they were holding meetings with relevant agencies to try and find the cause of the landslip.

Dog walker, Julie Short, of Osgodby Crescent, called the council after witnessing huge cracks in the ground.

She said: "I think this is extremely worrying. This could be as bad as the Holbeck Hall disaster.

"Over the winter the coastline has continued to recede and we think it has now receded about six metres (20ft)."

A spokesman for Scarborough Council said the issue was a matter for the National Trust and bosses there have confirmed the area is of concern and they have been surveying the situation closely.

Highway chiefs at North Yorkshire County Council said they were concerned about the problem at Knipe Point and would be keeping a close eye on the A165 which runs near to the homes Nick West, manager for North Yorkshire County Council highways and transportation, said drainage from the new bypass was being directed towards Cayton Bay.

He added: "If anything, it will improve the area rather than make it worse."