Employees at a refugee housing company in Germany joked about guillotining asylum seeker children, according to emails leaked to local media.

In one email exchange, company bosses at PeWoBe, which provides housing for refugees in the German capital, discussed what to do with a €5,000 donation from BMW, reported Berlin tabloid BZ.

"What about if we instead have a small child-guillotine?" wrote one employee, identified as Peggy M, who the newspaper alleges once unsuccessfully stood for election as a candidate for the far-right DVU party in Brandenburg.

Other company employees responded by sending pictures of people being guillotined, and of a children's slide with a barbed grater at the bottom. "OHHHHH how nice!!!", replied Peggy M.

In 2015 more than one million refugees and migrants entered Germany, many fleeing conflict and poverty in the Middle East. There has been growing hostility to the government's asylum policies in a response to terror attacks by refugees, while refugee accommodation has been attacked by far right groups.

PeWoBe's three Berlin shelters and six joint ventures are home to around 3,000 refugees, Berliner Zeitung reported.

In the shocking exchange, company managing director Birgit B described the guillotine as a "totally good suggestion – it will however bring us back into the press and we don't want that". After Peggy M complained about the mess that would be caused by a guillotine, Birgit B responded that cleaning up would be a "nice job for the maximally pigmented."

In an exchange over what to do with the bodies, one company leader allegedly suggested using a "large scale crematorium."

A PeWeBo lawyer told the newspaper that the comments had been taken out of context and were intended humorously. He said that an autocorrect function had mistakenly replaced another word with 'guillotine' in the exchange.

Berlin's minister for social affairs Mario Czaja described the views expressed as "unspeakable", and said that all the company's contracts in the city had been cancelled immediately.