Tenancy Deposit Query

Tenancy Deposits

Can you tell me if I can unprotect a deposit that I hold and use it against rent arrrears , I have been given conflicting advice on this . The property has been let to three tenants all whom have signed the tenancy agreement , they missed one months rent payment which is the equivalent of the deposit held and then moved out a month later at the end of April 2012.
They signed a 12 Month agreement which ends on the 31st July 2012 so strictly speaking they are still liable for the rent up to the end of July , however I am happy to get the property back and call it quits if I can offset the arrears against the deposit held .