Michael Howard has challenged the prime minister over the "chaos" in the UK's immigration and asylum system.

The Tory leader's attack came in the wake of claims that ministers knew that economic migrants from Bulgaria and Romania bearing fake documents were being waived through the visa process.

Amid angry scenes in the Commons on Wednesday he warned that the Home Office had lost control of asylum policy.

"On Monday the home secretary said this was all about naked politics. Yesterday he said it was all very serious and profound and that he was going to suspend all applications from Bulgaria and Romania," Howard said.

"Isn't it the case that the home secretary has lost control of his department, the immigration minister is clearly not up to her job and that the government's immigration system is an utter and complete shambles?"

Tony Blair hit back by warning that it took 18 months to reach an immigration decision during Howard's time as home secretary in the 1990s.

And he denied that asylum seekers are "being waived through on false documents".

"There has been a very serious allegation of fraud," he said.

"We will investigate it properly as we should and we will report back. But this issue should be handled with care for very obvious reasons as everybody in this House knows."

Whistleblower

Howard said the British counsel in Bucharest had written to ministers 17 months ago in a bid to secure a crackdown on false work permit claims.

Reflecting on recent developments, he asked "why no action had been taken" despite a series of warnings about "scams" in the immigration process.

"Is it any wonder that everyone thinks the government's immigration is in chaos?" he asked.

Responding in the Commons the prime minister said the allegations were now subject to an inquiry.

"There is a specific allegation that has been made. It has to be looked into thoroughly," he said.

Howard said the government had "relaxed controls even further" during the period ministers were being warned that the immigration system was being abused as part of a concerted fraud campaign.

The prime minister said it would be "sensible not to speculate" but to allow the Sutton inquiry to examine "the scale of the problem and the action that has been taken".