David Blunkett has announced that up to 15,000 families who have sought asylum in the UK are to be allowed to remain.

The home secretary announced the "one-off" move on Friday in a bid deal with cases that have "suffered from historical delays" in the asylum system.

The amnesty will cover those who sought asylum in the UK more than three years ago and had children before that date.

It is likely to include some families whose children have been in the UK for seven years, who are already entitled to apply for leave to remain here under an existing concession.

Also covered by the exercise will be cases where the final appeals process has not been exhausted and those where final decisions were made but the asylum seeker was not removed from the UK.

The Home Office pledged that people who have committed a criminal offence, lodged multiple asylum applications or whose cases are the responsibility of countries elsewhere in Europe will be excluded from the exercise.

With many of the families affected thought to be supported by the taxpayer, the government indicated that offering formal permission to live and work in the UK could ease the burden on taxpayers.

Moving 1,000 families off state support is estimated to deliver savings in support costs of around £15million, in addition to any potential savings on legal aid.

Blunkett said the decision had been prompted by the "legacy of the historic inadequacies".

"This does not manifest itself only in statistics but in the lives of real families in our communities," he said.

"Granting this group indefinite leave to remain and enabling them to work is the most cost-effective way of dealing with the situation and will save taxpayer's money on support and legal aid.

"These are difficult decisions but I do not believe it is the best use of taxpayer's money to take these expensive longstanding individual appeals through the courts. I want to ensure our relentless focus is on steadily increasing the proportion of failed asylum seekers removed from now on."

The home secretary said the move would also "enable those who have suffered years of uncertainty over their status to move off benefits and into work to fully contribute to society."

But shadow home secretary Oliver Letwin said the move would "send out a signal that 15,000 people who have failed to establish a claim will be allowed to remain indefinitely".

'This amnesty is a result of the government's failure to deport failed asylum seekers in significant numbers," he said.

"This decision will make Britain a magnet for asylum seekers who now know that even if their cases are rejected they could be allowed to stay.

"The British people will be appalled at this latest sign of the government's abject failure to sort out the chaos in the asylum system."

The latest government move was coupled with new measures to end all future support for families who have been refused asylum if they refuse to take up the offer of a voluntary, paid route home.

"I have not been afraid to take the difficult decisions and we now have some of the toughest laws in Europe to deter abuse of the system," said Blunkett.

"As a result asylum claims have halved and the backlog of cases is the lowest for a decade. And we are driving forward with legislation at the earliest opportunity to deal with the remaining parts of the system in need of substantial reform."