The key proposals outlined by Home Secretary David Blunkett:

Smart card

A smart card, to be called the Application Registration Card, will carry fingerprints and a photograph of asylum seekers.

These will replace the standard acknowledgement letter which the Home Office says are ineffective because of widespread forgery and counterfeiting.

Accommodation Centres

Four trial centres with 3,000 beds in total will be established providing full board and lodgings, healthcare and education.

Those staying in accommodation centres will not be detained inside, but will not be offered any alternative forms of financial support if they leave.

Asylum education

Home Secretary David Blunkett made a late addition to the Bill when he proposed removing asylum seekers' children from ordinary schools and proficing their education in special centres, separate to the main state sector.

He said that this would end the "swamping" of local schools in some areas by children who speak no English.

Critics including many Labour MPs say the plans could worsen race relations.

Removal centres

There are currently 1,900 places in the detention centre - this will be increased to 4,000 places as part of measures intended to speed up removals of failed applicants from the UK.

The fast track centre at Oakington will continue to process straightforward asylum claims in about seven days.

Those detained under immigration powers will no longer be held in prisons - that practice will stop from the end of January 2002.

Voucher review

There will be a short term increase from �10 to �14 in the value of the voucher which can be exchanged for cash, but within a year the smart cards including automated credit transfers will supersede vouchers.

Dispersal review

Induction centres will be established to replace the use of bed and breakfast accommodation in areas where most applications are lodged.

There will be further efforts to better manage dispersal of asylum seekers into language "cluster areas", with better liaison with local authorities.

Appeals

The backlog of claimants will be addressed by cutting out delay and streamlining the appeal system. Failure in application will require individuals to leave immediately.

Green-card style work permits

A new scheme, the Highly Skilled Migrant Entry Programme is intended to allow those with "exceptional skills" to apply to come to the UK to seek work.

The immigration rules will be changed to allow those graduates completing a degree from UK universities to stay in the UK if they obtain a work permit.

There will also be discussions with unions and employers to expand work permits in sectors of the economy where there are skill shortages and need for temporary workers for seasonal employment.

Working with the EU and UNHCR the Government would allow entry to agreed nominated refugees from outside of the country.

People traffickers

A cross-departmental group, headed by Lord Rooker will bring forward proposals to stop human trafficking.

The announcement of a White paper to look at the needs of asylum seekers in language and education demands.