Scores of caravans now line the grass verges leading into Centurion Way, in Crossgates, as visitors to this year's Seamer Horse Fair set up camp on land owned by Persimmon Homes.

The residential area has been chosen by the gipsies who have declined to stay at a designated site at High Eastfield as it was boggy and unusable after heavy rain.

The council has now closed the designated site, and have transferred amenities to the housing estate. Andy Skelton, head of Environmental Services, said: "A number of travellers decided not to use the site and established themselves at Hutton Buscel and subsequently Crossgates.

The first travellers arrived at Crossgates on Thursday but were successfully warned off by police and council staff. A further group of travellers arrived on Friday evening and quickly established themselves and numbers have increased since.

"The council is working closely with the police and the county council to try to manage the situation in a way that causes the least inconvenience to residents.

"With reluctance the council has moved the portable toilets and skip which were on the High Eastfield site to Centurion Way. This was not done to give an official approval to the travellers' use of Centurion Way but in an effort to encourage the travellers to use those facilities rather than cause nuisance or offence."

Residents in Crossgates received a letter from Inspector Leo Suret, the Eastfield and Filey commander, explaining how the police intended to deal with the situation.

It read: "We the police, and the land owners are considering taking legal action to move the travellers,police, and the land owners are considering taking legal action to move the travellers, however it is unlikely that this will take effect for some time. We are therefore managing the situation to reduce the possible nuisance and inconvenience to residents. North Yorkshire Police are committed to providing high visibility patrols in the area and this will be maintained until the situation is resolved."

Police and the council have also placed barriers part of the way down across Centurion Way to prevent the gipsies and travellers moving any closer to the houses.

Olivia Stirling, of Claudius Grove said: "The weekend's events have provided us with a perfect example of Scarborough Councils poorly researched and organised plans. I am very concerned about having them there with regards to mess and confrontation. I am very surprised that nothing has kicked off yet."

The gipsy and travelling community staying in Centurion Way say they're dismayed at the site provided for them at High Eastfield.

Ada Farrow has attended the fair for many years and remembers visiting as a child. She said: "I am a gipsy and I am proud of it. I am sure the people at the council would not let their children run around in a muddy field so why should we?

"The field they provided us with was a stubble field. I was just thick mud, which we had to pay £30 to stay in. We couldn't even move our trailers around, everyone was getting stuck, even the council workers were getting stuck. It was terrible."

Horse trader John Jackson was visiting the fair with his wife Lorraine and their three children. He said: "People are too quick to tar us all with the same brush. They do not realise that people from all over the country visit, and not everyone are gipsies or travellers. We come because we always attend horse fairs. It was really disgusting up in that field."