Damage estimated at up to £30,000 is thought to have been caused to a proposed private sector children's home after rumours that it was to house a sex offender.
Windows were smashed and taps left running after the property in the Wolverhampton area was broken into last night.
Concerns have been growing over the weekend about the use of the renovated building, which is owned by the charity Green Corns Ltd.
Flyers were said to have been posted in letterboxes in the surrounding area warning that a paedophile was about to move in and a protest was mounted outside the house.
A Green Corns spokesman told the Press Association a number of meetings were held over the weekend to allay fears.
He added: "Somehow the local residents got it into their heads last Friday that we were going to move a sex offender into the house."
Green Corns chairman and chief executive Robert Oreschnik was called at 9.20pm on Monday to inform him of the damage, the spokesman explained.
The house, whose exact location cannot be revealed because of a High Court injunction, is now boarded up but company contractors have so far been unable to get in to assess the damage. But initial estimates put the damage at between £15,000 and £30,000.
Green Corns is one of the UK's largest providers of specialist care for children but has been criticised for not fully informing local people it was planning to open care homes for troubled youngsters in their area.
It caters for vulnerable children and young people aged 10 to 17 and provides them with 24-hour care and tuition at each home, costing up to £5,000 per month.
The company spokesman said they were still keen to speak to residents and councillors to resolve the situation.
But he added: "We have to put these children in an environment where they're safe and where the example they're shown by the local community is a good one.
"It's ironic to complain about criminal behaviour and then indulge in it."
West Midlands Police confirmed officers were called to the area on Monday but no arrests were made.
"We can confirm a peaceful protest took place last night in the street which a large number of people attended," they said in a statement.
The home is not due to open for another six months and has yet to be approved by the Commission for Social Care and Inspection or recruit staff.