Mr Blair says there will be no loss of sovereign control

The prime minister is joining a summit in Brussels on Thursday to discuss plans aimed at streamlining the issue.

He recently said the UK would only participate in EU-wide action where it was in UK interests but the Tories say he is surrendering a key veto.

Also on the summit agenda is economic reform and the stalled appointment of a new commission.

Mr Blair says Britain will retain sovereign control over national borders because it only needs to opt into the EU measures it likes.

He also claims pooling decision-making in a 25-nation EU will streamline rules affecting asylum and immigration.

But shadow home secretary David Davis accused him of playing the "politics of confusion". He said Britain's ability to make its own decisions on the issue will be eroded.

The Liberal Democrats instead say the move is pragmatic and gives a better chance of securing a European asylum solution.

'Disappointing' progress

Maeve Sherlock, chief executive of the Refugee Council warned against the agreement creating a "Fortress Europe".

The leaders gathered in Brussels are also assessing progress on the economic reform plans agreed in Lisbon in 2000 to make Europe more competitive.

The former Dutch finance minister Wim Kok will deliver a report on the progress made so far.

It says "disappointing delivery is due to an overloaded agenda, poor coordination and conflicting priorities" but also a "lack of determined political action."

The incoming European Commission will have a key role in driving forward the reform agenda but its appointment has been delayed by the row over Rocco Buttiglione.

Mr Buttiglione has stood down as a nominee-commissioner and new commission president Jose Manuel Barroso says he now close to announcing his proposed new line-up.

Iraqi interim Prime Minister Iyad Allawi is also travelling to the summit on Friday as the leaders agree a new aid package for his war-torn country.