By Toby Melville

PORTLAND, England (Reuters) -Britain began moving some migrants on to a large residential barge on its southern coast on Monday, as part of plans to save money and remove what the government called the "pull" of hotels for those arriving in small boats.

Prime Minister Rishi Sunak has made cracking down on illegal migration a major priority ahead of a national election expected next year, pitching his Conservatives as being tougher on the issue than the opposition Labour Party, which enjoys a strong lead in opinion polls.

Seeking to deter people from arriving in Britain, it is moving migrants on to disused military sites and barges like the grey, three-story Bibby Stockholm in Portland which can house around 500 people in more than 200 bedrooms.

It is also trying to send asylum seekers to Rwanda, although that plan has been bogged down in the courts and still hinges on a ruling by the Supreme Court on its legality.

Fifteen migrants have boarded the Bibby Stockholm barge, Cheryl Avery, Director for Asylum Accommodation at the Home Office, told reporters, adding that more asylum seekers were to be brought on over the coming weeks.

"There have been some challenges, some minor legal challenges ... Accommodation is offered to all individuals on a no choice basis so we are looking at how we manage that going forward," she said, without giving further details.

More than 50,000 asylum seekers are living in hotels after they made the final part of their journey in small dinghies across the Channel from France. The government says that hotels are costing more than 6 million pounds ($7.6 million) a day.

"We are stopping the use of hotels to house illegal migrants at the taxpayers’ expense," Sunak's No. 10 office said on messaging platform X.

"Instead, we’re providing alternative sites that are more manageable for communities, providing the essential needs of those accommodated and minimising the impact on local services."

Home Office minister Sarah Dines told Sky News that the barge sends a message that Britain will give "proper accommodation but not luxurious". Migrants are expected to be housed on the barge for three to nine months while they go through the asylum process, Avery said.

The policy has divided local communities, with some describing the housing for people arriving from countries such as Iraq, Iran, Syria, Afghanistan or Albania as inhumane.

Others have been angered by the impact on local services and have questioned whether the sites will become targets for protests.

Local authorities said on Monday they were investigating letters sent to some people and businesses in the area around Portland Port, suggesting they could be targeted if they offered support to asylum seekers on the barge.

"The welfare of asylum seekers in our care is of the utmost importance," a spokesperson for the Home Office, or interior ministry, said.

"(We) continue to work closely with the local police and our partners on-the-ground to ensure the safety of any individuals housed on the site and the wider community."

Government figures show that nearly 46,000 asylum seekers made the dangerous crossing from France to the southern coast of England on small boats last year. The number so far this year stands at nearly 15,000.

The government has said the Bibby Stockholm will only house single men, providing "basic and functional" accommodation, along with the provision of healthcare, catering facilities and onboard security.

(Reporting by Sachin Ravikumar and Suban Abdulla, additional reporting by Muvija M; Editing by Kate Holton, Nick Macfie and Mark Potter)