Home Secretary David Blunkett brought forward abolition of the payments following a riot and fire at the showpiece Yarl's Wood detention centre in February.

The move has been welcomed as a "big victory" by campaign groups, which claimed the vouchers deprived refugees of their dignity.

But they are angry at a small rise in the overall value of the payments, claiming they are worth a third less than Income Support.

Before the Yarl's Wood fire Mr Blunkett had planned to end the voucher system in the autumn.

The riot brought forward the scheme's end

The vouchers were introduced under his predecessor, Jack Straw, and could be exchanged at designated shops for food and clothing.

But apart from the claims about the stigma attached to the vouchers, there were also practical problems as many supermarkets refused to give change for goods bought with them.

Although several options for replacements were considered, including automated credit transfers, cash payments through post offices were chosen as the most practical method.

The subsistence payments will also increase in value.

Asylum seekers aged 18 to 24, who previously received a combination of vouchers and cash worth �28.95-a-week, will receive a cash payment of �29.89.

The over-25s, who previously received a package worth �36.54, will get a cash payment of �37.77.

Nick Hardwick, the Refugee Council's chief executive, welcomed the end of the "humiliating and degrading voucher system".

The voucher system was introduced on the false assumption that people were coming here to get access to benefits

Refugee Council

He said: "It is a big victory for everyone who campaigned on this issue."

But Mr Hardwick also expressed concern that the payments were still much lower than Income Support.

And he warned that new rules could force recipients to move into government-sponsored accommodation far from friends and family.

He added: "The voucher system was introduced on the false assumption that people were coming here to get access to benefits.

"This should banish the idea that making life in the UK even tougher for people fleeing persecution can reduce numbers coming."

'Restore dignity'

Liberal Democrat home affairs spokesman Simon Hughes welcomed the end of the "degrading, discriminatory and impractical" vouchers.

He said: "The new, more flexible system for providing necessary resources for asylum seekers is welcome."

T&G general secretary Bill Morris said: "It is right that the Government ends the humiliation of the vouchers and restore some dignity to asylum seekers. We welcome that."