The government's Nationality, Immigration and Asylum Bill is en route to the House of Lords after clearing the Commons by 362 votes to 74.

Labour's Neil Gerrard said he would vote against the government, stressing that the bill was "fundamentally bad legislation".

The proposals will now be picked over by the House of Lords where Tories, Liberal Democrats and some Labour MPs have said they will try to make changes.

On Tuesday, Home Secretary David Blunkett dodged a potential clash with more than 30 Labour MPs, led by Mr Gerrard, against plans to segregate asylum children from mainstream schools.

The government must work harder to make our vision of equality a reality for these communities

Angela Eagle

A strict timetable meant the rebels moves to change the bill could not be debated or voted on despite protests from Tories and Liberal Democrats.

Mr Blunkett did offer a concession which allows asylum seeker children to be educated in normal schools after six months at an accommodation centre.

Blunkett said there would be experiments with smaller centres

The home secretary said the bill struck a balance between giving asylum seekers a "warm welcome" and a "hard-headed and sensible but sensitive approach in ensuring our hospitality is not exploited".

Shadow home secretary Oliver Letwin described it as a "curate's egg - with some good bits and some bad bits".

While welcoming the proposed accommodation centres, he stressed smaller sites would be better.

'Work harder'

Labour's Angela Eagle, who was reshuffled out of her role as home office minister, expressed her support for the government's aims.

But, she insisted: "Too many of our ethnic minorities communities still suffer a daily experience of racism and discrimination.

"The government must work harder to make our vision of equality a reality for these communities."

UK taxpayers should not subsidise people who have tenuous links to the UK

Beverley Hughes

Liberal Democrat home affairs spokesman Simon Hughes said the bill was "bad for race relations", "bad for asylum seekers" and "not fit" to proceed to the Lords.

Earlier, the Commons heard how the bill proposed to withdraw all support from asylum seekers who refused to take up free travel to the country where they had acquired refugee status.

But Home Office Minister Beverley Hughes said local authorities would be allowed to offer short term accommodation to their children.

Appropriate expenditure?

The minister insisted that government had to "grasp the mettle" of perverse incentives in the current arrangements.

These enabled people to claim support from local authorities even though their status excluded them from other sources of support.

Letwin wants asylum seekers in centres for 10 weeks at most

Ms Hughes stressed: "Should local authorities' funds appropriately be used to support people who have established refugee status elsewhere or continue to support those whose claim here has failed...?

"We have concluded that the answers to those questions is 'no'."

She argued: "UK taxpayers should not subsidise people who have tenuous links to the UK.

One way trip

"We are therefore introducing these measures to ease the pressure being brought to bear on local authorities to clarify their legal position and... provide those individuals and their families with the means to return to their home country or country where they acquired refugee status.

"For those who have citizenship or refugee status in other EU states, short term accommodation may be provided to children as well as a one way journey to their home country.

"If the family does not take up the offer of travel or fails to travel, all support will be withdrawn..."

Ms Hughes accepted demands that powers to remove financial assistance should be debated further before being brought into force.

Other parts of the legislation would see hauliers having their vehicles confiscated if they refused to pay or defaulted on fines for transporting illegal immigrants into the UK.

Citizenship ceremonies

A sliding scale of new civil penalty fines up to �4,000 would replace the fixed-penalty system thrown out last year.

Other amendments are set to deal with thousands of refugees who travel to the UK "shopping for higher benefits".

The bill also proposes a pilot phase of asylum seeker accommodation centres and citizenship ceremonies.

It aims to streamline the appeal process of those denied the right to remain in the UK and raise the maximum jail term for people convicted of harbouring illegal immigrants from six months to 14 years.