By Dominic Casciani
BBC News community affairs
More than 100 councils are doing nothing to end tensions between Gypsies and other members of the public, Britain's race watchdog has said.
Unauthorised encampments are potentially avoidable, say the CRE
A Commission for Racial Equality survey report attacked councils for ignoring easily solved problems.
Half of the councils questioned ignored their legal duties to promote good race relations, said the CRE.
As little as 500 acres of additional caravan sites nationwide would end annual battles, said the CRE.
The CRE's report, which took 18 months to compile, looked at how councils were facing their legal duties to promote good race relations with Gypsies and Irish Travellers while also treating them the same as any other resident.
Some 236 councils agreed to take part anonymously in the research into how they treated travelling people.
A further 400 bodies from police forces to health authorities also took gave their views.
Some 49% of councils admitted to the CRE that they were failing to deal with community tensions and promote good relations, despite a legal duty to do so.
Two-thirds of councils said there had been tensions between travellers and other members of the public.
In almost all cases, the dispute erupted over unauthorised encampments, resulting in an annual £18m legal bill.
Councils were generally failing to collect data and information on Gypsies and Irish Travellers, despite the fact that they did so for other groups in society in order to help them plan housing and other services.
The CRE found that where councils were trying to improve relations between travellers and other members of the public, the efforts were mostly one-off "cultural events", rather than a concerted attempt to tackle historic antagonisms or prejudices.
Count of traveller caravans, July 2005
England total: 15,711
Unauthorised sites: 4,067
Socially rented: 6,458
Private sites: 5,186
Source: Dept for Communities and Local government
In turn, the race watchdog said that general public hostility, coupled with anti-social behaviour from a minority of travellers, made it difficult for councils to support sites - leading to a further increase in tension.
Launching the report, Mr Phillips said the only sustainable solution was for councils to provide enough legal sites and recognise a national shortage in stopping places.
"Just 500 acres would be enough to meet all site needs," he said. "We found a consensus on this across government so it's ludicrous that the cycle of unauthorised sites, eviction and hostility cannot be broken."
More than 100 councils had admitted they had ignored their duty to tackle tensions, but the watchdog did not intend to use its legal powers to make them do so, he added.
The CRE would not name councils which were breaking the law, he said - explaining that it was only able to find out how bad the problem was by promising anonymity.
Some Gypsy rights campaigners have attacked the CRE in the past, saying that it has proved a toothless watchdog in the face of widespread prejudice.
Travellers say that a nationwide shortage of sites and stopping places, documented by experts and the government, has forced many communities to take drastic measures.
One official study found a shortage of at least 4,500 caravan places in England and Wales.
The latest official figure shows some 4,067 caravans illegally sited, most in small groups but some in major encampments involved in lengthy and extremely expensive legal battles.
Ministers recently changed the law to force councils to think more about the needs of travellers.
The new rules mean councils are obliged to consider the potential needs of travellers along side other groups when they work out their local housing plans. Local councils have also gained more powers to stop unauthorised encampments.
Sarah Spencer, the CRE commissioner who led the inquiry, urged councils to rethink their policies.
"Enforcement action can no longer be an end in itself. Barricading land so there is nowhere to stop, or targeting all resources towards enforcement is costly - amounting to £18m a year - and fails to tackle the long-term issues."