The site of Grenfell Tower is to be handed back to Kensington and Chelsea council within days despite local anger at the prospect of the borough’s involvement, the Guardian has learned.

The police investigation at the site of the disaster in west London, in which 71 people died, will come to an end imminently and, with the site no longer designated a crime scene, it will be released to the council, which owns the plot.

Residents had been under the impression that the Ministry of Housing, Communities and Local Government would set up an independent organisation to take on responsibility for the building before the police investigation had finished, and are unhappy at the handover.

As a last resort, the government department had been thought likely to take on temporary control of the site itself, though officials had made clear that they were reluctant to do so because they felt it would go down badly with the community.

The site had been expected to be turned into a memorial to those who died in last year’s fire after the council said this spring that it would put the community at the heart of decisions over its future and had no other plans for it.

Adel Chaoui, from the survivors group Grenfell United, criticised the decision to release the land back to the council. “It’s a huge conflict of interest and distressing to the victims that RBKC, who are under investigation for corporate manslaughter, will have anything more to do with Grenfell tower, even in name,” he said.

“The government has had over a year to come up with other solutions and we’ve told them exactly how survivors and bereaved feel about this.”

Chaoui, who lost relatives in the fire, added: “Survivors, bereaved and community are still working on plans for a fitting memorial for our loved ones in the long term.”

The tower is expected to be demolished after forensic teams have finished their work. It is currently covered in white sheeting.

Plans for Grenfell’s future have been a source of anxiety for the bereaved, survivors and the local community. Some have even said they would like the burned out building to stay in place as a permanent memorial.

James Brokenshire, the local government secretary, told MPs last month that no decision had yet been taken on when, or whether, the tower would be demolished. Theresa May has given her personal commitment, however, that the community would be at the heart of the decision-making process, a pledge which has been formalised in a set of written principles governing consultations on the future of the site.

Council chiefs are understood to be unhappy about the decision to release Grenfell back under its control, even temporarily as planned, as it believes that residents should lead the decision-making process through an independent body.

It has spent the last year rebuilding relationships with residents after the disaster and they remain fragile, with 39 households still waiting to move out of hotels, though of those 25 now have new homes ready move into, according to council figures.

A spokesman for the Royal Borough of Kensington and Chelsea (RBKC) said: “It is right that the Grenfell community – the bereaved, survivors and residents – decides on the future of the tower site. They must have full control to shape the legacy of Grenfell following this tragedy.

“The council’s only role should be to help make this happen. Earlier this year we signed up to a set of principles with the government committing to this and our position has not, nor will, change. The community decides.”

A spokesman for the Ministry of Housing said: “The government remains absolutely committed to working with the community on the long-term future of the site.”

A Metropolitan police spokesman said: “The MPS is currently working with RBKC, London councils and central government departments to identify who will take responsibility for the tower when it is no longer a crime scene. It is anticipated that the tower will be released as a crime scene in July or August 2018.”

The site is currently run by the independent site management team that has overseen health and safety, security and ongoing investigations since June 2017. It will continue to manage the site, at a cost of around £1m a week, even after responsibility has been handed back to the borough.