An alarming infestation of “toxic caterpillars” has left neighbours in Dalston urging their landlord to act.

The creatures are thought to be either brown-tail or gypsy moth caterpillars, which are covered in a thin layer of hair that they shoot off when threatened.

The hairs can cause breathing difficulties and irritation if they come into contact with skin. Direct contact with larvae is not necessary, as the hairs can become airborne. According to the Global Invasive Species Database, the gypsy moth is one of the 100 most destructive invasive species worldwide.

The caterpillars were first sighted in Atkins Square in Dalston Lane on June 5. Just two weeks later hundreds were visible outside the doors of the housing blocks run by Peabody housing association, as well as at the entrances to the Co-op, the More Yoga studio and Pembury Pre-School nursery.

Neighbourshave been urging Peabody to help, fearing that the problem was quickly escalating. Responsibility for pest control lies with the owner of the land affected. One, Sienna Murdoch, told the Gazette: "We are trying to get Peabody to make this plague of caterpillars a priority but they don't seem to take notice."

Ms Murdoch described how trampled caterpillar blood could be seen staining the pavement, and how plants have already been savaged by the caterpillars and left to die. "It is escalating quickly and could spread to a wider area if Peabody don't act sooner," she said.

But a Peabody spokesperson said they were dealing with the problem. "We want to avoid using chemicals to control the insects because that could be detrimental to other wildlife and pollinators in the area," they said. "Expert advice is that they are gypsy moths and not brown tail. The moths are not unusual in the UK and all the professional advice is that they pose an extremely low risk.

"Our estate teams and landscape experts are on hand to offer advice to people and are making every effort to manage the situation."

Hackney Council said it had not been aware of the infestation until the Gazette got in touch. "This is not a council-managed estate, however we are concerned that it does not spread to other parts of the borough and will be in touch with Peabody to offer them support and what advice we can," they said. "We will also be monitoring other estates and planted areas."