Margaret Hodge urged the party to address the "growing anger and racism" among some Labour voters.

Earlier this month the BNP won a council by-election in Mrs Hodge's normally solid Labour constituency.

The BNP gained Barking and Dagenham Council's Goresbrook ward from Labour with 1,072 votes to Labour's 602.

Speaking at a fringe meeting at Labour's annual conference in Brighton, the children's minister hailed the contribution black and Asian people were making to local communities .

She said Britain should be more like the US, where immigrants were welcomed for the contribution they made to the culture and economy.

She urged Labour not just to focus on reducing the number of asylum seekers, which risked reinforcing the "underlying forces of prejudice".

The party should instead give "clear leadership" on race and avoid giving out "mixed messages", she added.

"If we don't address the growing anger and racism among some of our traditional supporters we will fail in our ambition to achieve equality and solidarity," she told the meeting.