Croydon Council managers wrote to thousands of tenants telling them that washing lines and three-pronged rotary clotheslines must be removed so as to prevent "heavy and wet" clothing from falling onto people below.
The fear is that residents will overload their washing lines and their clothes will be blown off in high winds - causing injury to anyone walking underneath.
The new letters, sent out this week, inform council tenants that if they do not remove the washing lines from their balconies they face losing their homes.
But angry residents say that even if they did have gardens to hang up their washing, thieves would take it.
A Croydon Council spokesman confirmed that tenants who did not remove the rotary clothes lines immediately were warned they face legal action.
"The use of rotary dryers attached to a balcony or a walkway presents a health and safety risk to other residents if they fall," the Telegraph quoted Council spokesman as saying.
"This could happen in high winds or when the dryer is overloaded with heavy and wet washing. They are also an eyesore," he added.
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