The Sangatte refugee camp will close by the end of this month, David Blunkett announced yesterday.

Under the terms of the deal, about 1200 Iraqi asylum seekers will arrive in Britain this week from the camp, with France taking responsibility for the remaining 300 inhabitants.

The home secretary said the deal will heal what had become "a festering sore" in relations between Britain and France.

The government is also negotiating a treaty with the French to operate frontier controls from the other side of the English channel.

The shadow home secretary, Oliver Letwin, welcomed the closure of Sangatte but questioned the legal basis on which the Iraqis were to be given work permits in Britain.