The UK government could face legal action from authorities on the English coast who say they cannot cope with the number of child migrants arriving from across the Channel.
Kent County Council is looking after more than 400 minors and says ministers should force other areas of Britain to share the burden.
With the number of Channel crossings rising, Kent said its services were at "breaking point" after 242 unaccompanied children arrived on its shores in the past six months.
A member of a refugee charity told The National the government could "fix this issue overnight" by providing more funding for other towns and cities.
“It’s an investment in young people that’s going to pay off,” Bridget Chapman of Kent Refugee Action Network said.
“It’s framed as a problem that’s got to be solved when actually these young people are an amazing asset to our community.”
Roger Gough, the Conservative leader of Kent County Council, told BBC Radio 4's Today programme that the numbers arriving this year were "well up".
He said the number of 403 young asylum seekers being cared for in Kent was well above the quota of 231 set out in a government protocol.
“Our big concern is that under current circumstances and where we’re heading, we are not able to provide a safe and decent service,” he said.
“That’s why we are both warning of that and taking the other steps that we are. It’s something that has been a constant source of debate between ourselves and the national government.”
The council said it will seek a judicial review by mid-June if the government does not provide a satisfactory response.
The UK Home Office said it was encouraging more areas to take part in the transfer scheme, which Kent says should become mandatory.
“We recognise the longstanding role that Kent County Council has played in supporting unaccompanied asylum-seeking children and are extremely grateful for their contribution,” it said.
“We have already consulted on how to improve the scheme to make it fairer, the outcome of which will be published very shortly.”
Tony Smith, a former head of the UK’s Border Force, called for the armed forces to be brought in to help deal with Channel crossings.
He told the Telegraph there should be a "joint agency approach that could include military, police and a full range of UK assets to support the defence of our border and management of irregular migration".
“There doesn’t seem to be a long-term master plan which is about accepting that this is going to be a feature of our lives for the foreseeable future,” he said.
Ms Chapman said numerous councils had already offered to take in migrants but needed more funding from the government to enable them to do so.
Some of the young migrants have been helping out in vaccination centres and care homes during the pandemic, she said.
The Kent refugee charity will support the council in its legal action if it comes before the courts.
“If you get people the kind of financial and emotional support they need, that is going to pay off with very well-rounded young people,” Ms Chapman said.
“They are amazing young people. I’ve never worked with such an incredible bunch of young people.”