Architecture: What's the storey?

The phrase "listed building" summons up estate agents' descriptions of flat-fronted Georgian houses, ancient half-timbered manors and romantic country piles - the words have a magic and resonance not usually associated with 20th-century blocks of council flats. But increasingly, as history rolls forward, buildings from the recent past are being given the same status as those designed by Wren or Adam.

Isokon Flats in Camden, north London, and Keeling House, in the city's East End, are two such examples: both are modernist; experimental; made from concrete;council-owned - and both are derelict. Keeling House was designed by National Theatre architect Sir Denys Lasdun, as a post-war attempt to recreate the pre-war terraced neighbourhoods of Bethnal Green vertically. The 64-flat "cluster block" is listed grade II* but has been boarded up for four years. Isokon Flats has been vacant for less time and its status is even higher - grade I listed. Designed by Wells Coates in 1932, the flats were the first to be built in Britain in the fully modern style, and they had illustrious early tenants, including Agatha Christie, Henry Moore, Walter Gropius and Marcel Breuer - the latter were modernist architects fleeing Nazi Germany. Breuer went on to design the building's famous Isobar.

There is no serious argument over the architectural importance of the two buildings, but listing them has presented the two councils that own them with such serious economic problems that each is now trying to sell them.

Tim Ravenscroft, the Tower Hamlets borough housing officer responsible for Keeling House, previously worked as an architect and appreciates its architectural qualities, but argues that in his current position he has to be practical: "The design is interesting and fulfils its function, but it is the construction which is problematic. On a pragmatic level we have serious housing and funding problems. It is even costing us money to keep it empty."

In the past the council has called Keeling House "a running sore" on its funds and, after a failed attempt to restore it with the Peabody Trust housing charity, it is now exploring whether the private sector can take the building off its hands. Confidential negotiations are being conducted with a developer, but significant doubts remain about the viability of restoring the building, which would cost several millions.

Dickon Robinson, development director of the Peabody Trust, says: "There is a dilemma involved with these interesting buildings, and it is a fundamental question: do you save them by carving them up and flogging them off, or treat them as special cases and return them to their original state?"

In 1996, Robinson and the trust attempted to do the latter by restoring Keeling House and bringing it back into use as rented accommodation with an unsuccessful bid to the Heritage Lottery Fund. "We were cautious about long-term maintenance and decided it was not acceptable to skimp on it. This made the bid too expensive as far as the fund was concerned."

Since then there have been other rescue attempts at Keeling House: none has resulted in any work on the building, that continues to decay. "It undermines the whole neighbourhood to have this disintegrating monster in the middle of it," Robinson admits. So, the future of Keeling House remains in the balance. If this attempt to save it fails, Tower Hamlets will have to apply for listed building consent to demolish it.

The situation at Isokon Flats is more optimistic. Like its illustrious original tenants, the building remains popular. It is also better located than Keeling House, smaller, and it would cost less to restore, pounds 2m being the estimated figure.

Isokon also has powerful friends: architect Sir Norman Foster has said it is one of his favourite buildings; Lady Patty Hopkins, wife of Sir Michael - both architects - went to a recent meeting about the building's future; Lord Rogers apologised for not being able to attend; a trust has been set up to rescue it; and modern architecture conservation group DoCoMoMo UK is on the case.

DoCoMoMo UK co-ordinator Allen Cunningham admits: "Keeling House and Isokon have similar problems in that any prospect of selling or letting has to take into account the high cost of repairs. But Keeling has a particular problem in its location, whereas Isokon is in a bourgeois area and can be desirable within that context."

He says Isokon is "as close to avant-garde as England will ever get" and it is worth saving for its technical innovations, modern movement architecture and communitarian social programme. "I hope it won't need to become a cause celebre but Camden should be aware that influential eyes are watching what it does," he says.

Despite this, there are significant problems at Isokon. As well as their dilapidated state, the flats are very small, having been conceived as "minimum flats" designed to offer a cheap alternative to digs. A market solution to this would be to create larger flats by knocking down partition walls and sell them at a premium. But this approach is ruled out by Isokon's listing. So alternative solutions will have to be sought.

Better than most people, architect John McAslan knows what it will take to return Isokon to use. "What's there is pretty basic and in a poor state. All flats are in varying degrees of dereliction," he says. "It'll take time and be a costly job to restore it. It needs a high degree of engineering, structurally and acoustically, to make it acceptable today."

His practice became involved at Isokon in 1995, when English Heritage pressurised Camden into doing something about its deteriorating condition. McAslan made the building watertight and created a show flat from the one formerly lived in by Agatha Christie.

He favours the plan to sell Isokon to a private developer who could restore it. But he is a realist, and says: "If it proves impossible to repair it in its original arrangement, then other means will have to be sought."

The Peabody Trust and Dickon Robinson have no doubts about the answer at Isokon, but recognise it would not produce the sort of windfall return the council would like from the building's sale. "We would want to restore it, reopen the Isobar and rent the flats and bed-sits out to people on low incomes who wanted to live there and are prepared to accept that the accommodation is not up to modern space standards."

Councils owning modern architecture will always argue it is the very things for which they were listed - their experimental nature, innovative forms and construction techniques - that makes them too expensive to keep going.

Listing experimental modern buildings remains highly contentious; listing public sector experimental modern buildings is even more problematic. But, as the recent upgrading of Isokon to grade I shows, it is a course English Heritage and the Culture Department seem determined to pursue. But, says, Allen Cunningham: "Councils responsibilities are not purely social, they're cultural too. They are always prepared to look after a 12th century church, but it is just not sustainable to argue that only pre-20th century buildings are worth preserving."