A government advertising campaign that targets racially mixed areas with mobile billboards warning illegal immigrants to "go home or face arrest" is being challenged through the courts.

Vans carrying the abrupt message have been driven around six boroughs where there are high numbers of immigrants as part of a pilot scheme that has caused a coalition split and has been described by Nigel Farage, the Ukip leader, as "nasty".

The Refugee and Migrant Forum of East London (Ramfel) held "an emergency tension-monitoring" meeting with Home Office officials on Friday afternoon after receiving complaints about the intimidating nature of the message.

Rita Chadha, from the group, said it had sent a "letter before claim" to the Home Office and warned that the initiative had created "a sense of apprehension, tension and confusion" among her clients.

The move will cause further unease in Westminster where Nick Clegg's office is understood to have registered its anger at the week-long campaign, which was launched on Monday by the immigration minister Mark Harper. The campaign has been widely seen as a way for Conservative ministers to appear tough on immigration in the face of rising support for Ukip.

But the initiative has caused a wave of complaints from clergymen, MPs and their constituents. Bishop Patrick Lynch, who oversees migration for the Catholic Bishops' Conference, said: "Let's not mince our words, this mobile billboard campaign is a very inappropriate way to discourage illegal immigrants from staying in the UK, not least because the message that is often received is that all immigrants and foreigners are unwelcome in the UK."

He said some so-called illegal immigrants were failed asylum seekers, often with children, who had already been through very difficult situations. "These cases need to be dealt with compassionately, especially when there are children involved."

Vans have been driven around the London boroughs of Hounslow, Barking and Dagenham, Ealing, Barnet, Brent and Redbridge carrying billboards as part of the £10,000 pilot. The billboards show residents how many illegal migrants have recently been arrested in their local area and carry a text number for overstayers to use to arrange their return home.

The posters read: "In the UK illegally? Go home or face arrest. Text HOME to 78070 for free advice, and help with travel documents. We can help you to return home voluntarily without fear of arrest or detention." If deemed successful, the vans could be rolled out across the country, the Home Office said.

One Lib Dem source pointed out that the Home Office caused anger earlier this month by posting tweets warning "There will be no hiding place for illegal immigrants with the new #ImmigrationBill", accompanied by a picture of a handcuffed man of Asian appearance being placed into a van. "To what extent are these genuine attempts to address immigration and to what extent are they just 'dog whistle' politics?" the source said.

Diane Abbott, the Labour MP whose Hackney North and Stoke Newington constituency is one of the target areas, went further and warned it had already caused real concern in her constituency. "It is not so much dog-whistle politics as an entire brass band," she said. "It is akin to scrawling 'Paki go home' on the side of buildings. I don't believe this policy is going to achieve anything besides stoking fear and resentment."

Home Office staff have also grown uneasy with the campaign, it emerged. Mike Jones, from the PCS union, sent a letter of protest on Thursday to the permanent secretary, Mark Sedwill. "This is exactly the thing rightwing racist and fascist organisations such as the BNP, EDL, EVF and others feed off" to "stir up racial tension and hatred in these very same London boroughs", he wrote.

A Home Office spokesperson said the initiative had received several positive responses which would be assessed after the pilot ends on Monday. "This pilot is about targeting people who are here illegally and giving them the opportunity to leave the country voluntarily and with dignity, rather than be arrested, detained and removed.

"Voluntary returns are the most cost-effective way of removing illegal immigrants and save the taxpayer money," she said.