Click here to read Memo to chief investigation officer at the Department of Work and Pensions in full

A loophole through which thousands of illegal immigrants have been issued with National Insurance numbers will be closed "as soon as possible", ministers pledged today.

The promise came hours after The Times revealed that Jobcentre staff must hand over NI numbers to applicants even if they are suspicious of their visas. The Jobcentre officials are instructed simply to pass details of their suspicions over to the over-worked Immigration and Nationality Directorate (IND).

The NI number, which employers regard as a prerequisite to work, can also be used to claim various benefits.

A spokesman for the Deparment of Work and Pensions said that the existing vetting system was a relic from the foundation of the NI database in 1948.

He added: "Having reviewed this issue, ministers have decided to change the law as soon as possible so that people who have no right to live or work in this country are not given a national insurance number."

Last year, the details of 3,300 immigrants granted NI numbers on the basis of suspect documents were passed on, but the Home Office admitted yesterday that it had no figures for prosecutions

Conservatives dismissed the government promise to close the loophole, saying it came six years too late.

David Davis, the Shadow Home Secretary, said: "The Government should have acted six years ago when they were first warned. This has been a massive loophole in the law, which ministers knew about but failed to close.

"The Government really need to focus on the job in hand, do the hard work, and not just wait for a bad headline to come along before they act."

A report in The Times today quotes a memo from the Identity and Security Branch of Jobcentre Plus which says: "Where DWP (Department of Work and Pensions) is satisfied as to the individual’s identity, a NI number would be issued in this situation even if we have suspicions around his immigration status."

The memo continues "any prosecution action in respect of the falsified immigration documentation would be the responsibility of IND - NOT DWP."

Last night the DWP said the system - highlighted in the memo sent in June last year - was still in operation.

The revelations are the latest to hit the Government’s immigration policy. Last week John Reid, the Home Secretary, admitted that his new department was "not fit for purpose".

"It’s inadequate in terms of its scope, it’s inadequate in terms of its information technology, leadership, management systems and processes," he said.

Immigration minister Tony McNulty was shunted out of his post after the crisis over foreign prisoners not being considered for deportation.

Mr Reid has also inherited the ongoing scandal over the release from jail of 1,019 foreign prisoners - including murderers, rapists and paedophiles - facing possible deportation.

Anthony Thompson, head of employment at the CBI, welcomed the decision to change the law.

He said: "Employers face real difficulties in vetting potential employees because of the sophistication of scams by illegal immigrants seeking work. The apparent ease with which National Insurance numbers can be obtained makes an already-complex situation even more complicated - and even the most rigorous of firms can unwittingly make a mistake so any tightening of the rules which assists business will be welcome.

"The law must now be changed to ensure that National Insurance numbers are only provided to those eligible. It is not for employers to check whether National Insurance numbers have been authorised correctly - so it is critical to tighten the rules to restore confidence in the current system among employers."

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