The home secretary and leader of the opposition have clashed in the Commons over the government's latest asylum reform plans.

David Blunkett challenged Michael Howard to withdraw earlier remarks which branded the Home Office's proposals as "despicable".

The Tory chief was responding to press reports that the children of asylum seekers would be taken into care to force their parents to leave the country.

But ministers insist the policy was misrepresented ahead of the Queen's Speech.

In the new legislation the government is putting in place plans to withdraw benefits from failed asylum seeker families - meaning that children could be taken in to care in some cases.

Blunkett maintains the initiative is in line with the action social services would take in any equivalent circumstances.

Howard had used the high profile first day of the Queen's Speech debate last week to launch an attack on the policy. He said prime minister and the home secretary "should be ashamed of themselves".

But speaking on the home and constitutional affairs day of the Queen's Speech debate, Blunkett said the Conservative leader should withdraw the comments following the publication of the bill.

"The leader of the opposition last Wednesday made the terrible mistake of believing what he read in the newspapers rather than what I was saying in the press and radio and television [which are] the exact proposals which appear in the bill," he told MPs.

"We were not talking about taking asylum seeker children from their parents, we were talking about destitution where people refused to leave and where despite our best efforts they had not left the country but where their benefits by the very nature of the fact that they were illegal immigrants no longer continued to be paid."

But Howard dismissed the counter-attack - intervening in the debate to ask why Tony Blair had not echoed his home secretary.

"If what he is now telling the house is correct, why did the prime minister not take the abundant opportunity that he had last Wednesday to deny what I was putting to him?" he asked.

"And why has the prime minister still not replied to the letter which I wrote to him last Friday in which I asked him to clarify the government's intentions on these matters."

Blunkett said that as home secretary Howard had gone much further than the government was now proposing.

"This is not an issue for the right honourable gentleman to home in on," he said.

"Not least because in 1996 as he had passed through an act which didn't simply withdraw benefit from those who were failed asylum seekers but from all those applying as asylum seekers. That really was despicable."

Shadow home secretary David Davis claimed "someone from the government" had "certainly" placed the initial story in the Observer newspaper.

"It was crass, insensitive and profoundly distasteful," he said. "This was an exercise in grabbing the headlines in an effort to look tough...from a government addicted to posturing."

The home secretary also shrugged off criticisms that he had prejudiced the trial of a terror suspect who was arrested last week.

"I was merely making the point that the police do not use section 41 of the Terrorism Act without good reason...and I would do so again," he said.