Ministers should do more to tackle illegal working by immigrants, a committee of MPs has said.

The government was urged to take more effective action against employers who knowingly employ illegal migrants in a report into asylum and immigration published on Monday.

MPs on the home affairs committee called for rogue employers to have assets seized under the tough new powers in the Proceeds of Crime Act.

The committee also made a series of recommendations aimed at strengthening the asylum system.

The cross-party group looked at Britain's much-criticised asylum system and broadly backed the government's present strategy.

The committee concluded that nearly half of the asylum seekers who come to Britain were fleeing conflict rather than poverty.

"Whether we are dealing with genuine asylum seekers or economic migrants we should never lose sight of the fact that we are dealing with human beings, not numbers, and they should be treated accordingly," the report said.

MPs concluded that the recent fall in asylum applications was due in part to current measures brought in by home secretary David Blunkett.

They backed the use of induction and accommodation centres, fast track processing of claims, and language analysis schemes to detect nationality fraud.

But they also urged ministers to consider changes to the asylum applications system by putting more resources into achieving earlier decisions.

Their report also rejected the proposal of removing asylum seekers to offshore processing centres while their claims are handled.

They argued the initiative would prove costly, take a significant time to implement and leave real problems unsolved.

The MPs also concluded that people arriving at the UK who are most able to make claims are not necessarily those refugees whose needs are greatest."Recent government measures have helped to reduce the number of asylum applications. Removals have also increased," said committee chairman John Denham."But further action is needed to ensure that there is public confidence in the system, that applicants are treated humanely and efficiently, and that genuine asylum seekers are supported.

"More needs to be done to ensure that failed asylum seekers leave the UK. And action is needed now to prevent illegal working growing as the asylum system is tackled."

Responding to the report, the Liberal Democrats called on the government to change its direction on asylum policy.

"This report shows that the government should focus much more effort on improving the quality of asylum decisions rather than removing the right to benefits and legal appeals," said the party's home affairs spokesman Mark Oaten."The committee is right to say that a unified frontier force would be an important step forward in the fight against organised immigration crime and drug trafficking.

"Labour should stop chasing tabloid headlines and concentrate on getting a firm but fair asylum system in place."