Suella Braverman was warned over Manston migrant centre overcrowding
Suella Braverman failed to sign off on measures which could have eased pressure at a migrant processing centre, sources have told the BBC.
The home secretary was warned by officials the government was acting outside the law by failing to provide alternative accommodation.
Sources claim there was significant concern within the Home Office about the situation at the Manston centre.
The Home Office rejected claims that the advice was "deliberately ignored".
Ms Braverman is making a statement in the Commons on asylum processing centres.
The latest claims increase the pressure on Ms Braverman, who is also facing questions over the use of her personal email for government business.
She was forced to resign as home secretary over the breach when Liz Truss was prime minister but was reappointed six days later by Rishi Sunak.
She earlier repeated her apology for breaking the ministerial code in a letter to a committee of MPs - but also revealed that she had sent government documents to her private email six times during her 44 days as Ms Truss's home secretary.
Concerns Ms Braverman failed to act on legal advice about keeping asylum seekers at Manston were first reported by the Sunday Times.
Some 4,000 people are being held at a processing centre at the disused airport in Manston, Kent - when it was set up it was designed to hold 1,600.
Hundreds of people were moved there on Sunday after a fire attack at a separate migrant facility in Dover.
Migrants are only supposed to be kept there for 24 hours, but when the chief inspector of immigration visited last week, he found some people had been there for over a month. That included one family who had been there for 32 days, sleeping on mats in a marquee.
The Guardian reported on Sunday there were now at least eight cases of diphtheria and a case of MRSA at Manston.
Sources familiar with the situation told the BBC she was urged to act to tackle the issues at Manston during her first spell as home secretary.
One source told the BBC there was "crystal clear" advice that the government was not acting within the law.
Sources told the BBC Ms Braverman's predecessor as home secretary Priti Patel had been "reluctant" to sign off on sending asylum seekers to hotels but did so because she was aware that it was her legal duty to do so.
Grant Shapps also approved the transfer of migrants to alternative accommodation to ease congestion at Manston during his brief period as home secretary.
But sources allege that Ms Braverman did not take measures to ease overcrowding by sending asylum seekers to hotels - despite warnings over the legality of what was going on at Manston.
Senior figures in Whitehall said the move was extraordinary and called into question whether Ms Braverman could survive in her position.
A Home Office spokesperson said: "The home secretary has taken urgent decisions to alleviate issues at Manston and source alternative accommodation. Claims advice was deliberately ignored are completely baseless.
"It is right we look at all available options so decisions can be made based on the latest operational and legal advice.
"The number of people arriving in the UK via small boats has reached record levels, which has put our asylum system under incredible pressure and costs the British taxpayer millions of pounds a day."
Sir Roger Gale, Conservative MP for North Thanet, where Manston is located, said the situation at the centre was "wholly unacceptable" and suggested it may have been "developed deliberately".
"I was told that the Home Office was finding it very difficult to secure hotel accommodation. I now understand this was a policy issue and that a decision was taken not to book additional hotel space," he said.
Former top official at the Home Office, Sir David Normington, suggested it could be a breach of the ministerial code if Ms Braverman had deliberately decided not to book hotels to address the overcrowding as ministers must not knowingly break the law.
Ministers who break the code are normally expected to resign.
The government is under pressure to tackle the growing number of migrants crossing the English Channel in small boats, with nearly 1,000 making the crossing on Saturday and a further 468 crossing on Sunday.
So far this year 39,898 people have made the dangerous journey from France by boat.
The UK is spending almost £7m a day on hotels for asylum seekers - and the cost is likely to rise, MPs heard last week.
Labour's shadow home secretary Yvette Cooper said the whole asylum system needed to be overhauled to tackle the huge backlog of cases.