SHACK dwellers of a Cape Town informal settlement with a magnificent view of the sea say they will not move until they get decent houses.

The controversial camp in upmarket Bo-Kaap, situated at the foot of Signal Hill, offers a magnificent view of the city centre, Green Point Stadium and the harbour.

The camp has been there for more than 12 years, but now the squatters have accused the local imam of colluding with city authorities to kick them out and build a Muslim hotel on the land.

Camp leader Kenny Prins said his people would resist being moved to the temporary relocation area of Blikkiesdorp in Delft, about 28km from the city centre.

"These people won't survive in Blikkiesdorp. They need a decent place in the city centre," Prins said.

"We have a hotel for Arabs on Wales Street just near us, which should be enough. We won't move."

He accused the city of trying to take over the area because "it offers the best view of the city".

He said when the ANC was in charge of the province they got electricity and toilets, "but the current DA government has done nothing to improve our situation".

Prins said there were 24 shacks in the camp, and about 150 people living there.

Keyammondien Dalwai from Manenberg said he was worried about his sister who lived in the camp with her four little children.

"Keep them in Bo-Kaap. I feel hurt by this," he said.

DA ward councillor Belinda Hawker said the Imam at the mosque had proposed enlarging the mosque in order to accommodate more people.

Later, she said, he changed and applied to build a hotel for Muslim visitors from abroad. His proposal has not yet been approved as it has to be advertised widely, she said.

Hawker also said that a heritage study was currently being conducted on the site to determine whether any developments were suited for the site.

If the squatters were to be moved that would be in line with the government's housing policies, she said.

"The Bo-Kraal community is not under threat at all," she said.