Britain ordered an investigation into alleged discrimination against asylum seekers amid reports that many homes being given to them have red front doors that mark them out for abuse.
Hundreds of refugees have been living in the instantly recognisable homes, in a move which has been compared with the yellow stars that the Nazis forced Jews to wear.
The coloured doors make homes occupied by the refugees in poor areas of Middlesbrough easy to identify and have been blamed for numerous attacks in which people were victims of abuse from racist thugs.
Asylum seeker Mohammed Bagher Bayzavi, 58, said that the home he lives in - which is owned by property firm Jomast - has been targeted by local youths throwing eggs and bottles, and prostitutes who knock on the windows in the middle of the night.
"Everyone here knows the red colour is Jomast," he said. "Change the colour - anything but red."
Mr Bayzavi, who fled Iran three years ago, said neighbours whose homes did not have red doors were not targeted.
Both Jomast and G4S, which holds the Government contract to house asylum seekers, insisted that there was no deliberate policy to make them live in houses with red doors - but agreed to repaint the homes in order to remove any possible stigma.
A former local MP compared the red paint to the yellow stars that Jews were forced to wear in Nazi Germany. Ian Swales, previously Liberal Democrat MP for Redcar, said the doors were a "mark of separation" that "reminds you of Germany in the 1930s".
In February 2014 he confronted a G4S executive over the issue during a parliamentary hearing, but the policy was not changed.
After the latest revelations, Mr Swales said: "I thought it was shocking. I assumed the management of G4S would be equally shocked and would do something about it. To find out nearly two years later that nothing's been done is appalling."
Andy McDonald, Middlesbrough's Labour MP, added the red doors were "a way of marking people out that is reprehensible".