Douglas Council's spent over 1.1 million pounds on insulation for social housing, according to a Freedom of Information request.
This involved putting polystyrene beads into wall cavities.
The council says it acknowledges it might have worsened damp and corrosion in some houses, but denies it's the main cause.
It adds these issues were down to the general condition, age and construction of some properties at the time the insulation was installed.
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