The House of Lords is continuing to block government plans to shake up the UK's asylum system on Wednesday night.

After MPs overturned previous Lords defeats, peers on Wednesday night insisted by a majority of 53 to rethink plans for large asylum centres in rural areas.

The defeat came despite concessions from ministers, who scrapped plans to build a large asylum centre in rural Worcestershire in a concession to critics of its Nationality, Immigration and Asylum (NIA) Bill.

The government is in a race against time to get the legislation on the statute books by the end of the current parliamentary session on Thursday.

An aide for Home Secretary David Blunkett said the Lords decision on the location of accommodation centres was "unworkable".

Ministers are set to decide on Thursday whether to try to overturn the vote again in the Commons.

Earlier, the prime minister's official spokesman hinted further climb downs could be on the cards.

Asylum schools

Home Secretary David Blunkett has promised tough new asylum laws in return for the closure of the Sangatte refugee camp in Northern France, a move the French authorities agreed to on Tuesday.

The Throckmorton plan was opposed by residents

More than 40 Labour MPs staged a rebellion on Tuesday night over one of the key measures contained in the bill.

The MPs are angry about plans to teach asylum seeker children in accommodation centres instead of local schools, with some labelling it "segregation".

The issue is also likely to prove a flashpoint when peers vote on the measure later on Wednesday evening.

Earlier, Liberal Democrat Lord Dholakia told BBC Radio 4's Today programme he planned to support an amendment by the Bishop of Portsmouth, blocking the schools plan.

Confrontation

He said the concessions offered by the government on Tuesday were "a start".

"But there are other major issues that we need to confront in the House of Lords today (Wednesday).

"The government obviously has caved in and I am not surprised because we have always said it wasn't going to work."

But he said it was "unlikely" opponents of the government's asylum policy would be able to muster enough support to wreck the bill altogether.

The prime minister's official spokesman said there will be no more amendments to the legislation.

But asked if the government would agree to further concessions should it face another defeat, the spokesman said "let's see how we go - at the moment no-one's talking about further amendments."

Campaigners' delight

Meanwhile, campaigners in Worcestershire who battled against plans to build a 750-place asylum centre in their village were celebrating the government's decision to abandon the idea.

Councillor Malcolm Meikle, the leader of Wychavon District Council, said: "No doubt the residents in the surrounding areas will be delighted with this news and hopefully be able to relax a little more as the festive season approaches."

West Midlands Liberal Democrat Euro-MP Liz Lynne said: "This is a great day for the thousands of local residents who campaigned tirelessly to get these plans scrapped, and they should be congratulated.

"Just 24 hours ago, Labour ministers were claiming that if their asylum seeker plans were not passed by Parliament, the French government would keep the controversial refugee centre at Sangatte open.

"With Sangatte now closed, and the Throckmorton plans scrapped, those threats now seem distinctly empty."

The Sangatte camp closed its doors to new entrants on Tuesday, 10 days ahead of schedule.

French deal

Home Secretary Blunkett said he was "pleased" about the decision, which was an important part of the deal to tackle immigration from northern France.

The decision to scrap the Throckmorton centre, signals a move away from large accommodation units in rural areas, with trials planned of smaller urban units.

However, the government still plans to push ahead with large-scale centres at RAF Newton, in Nottinghamshire, and at Bicester, Oxfordshire.

In another concession, asylum seekers will also be allowed to leave accommodation centres after six months if their applications have not been processed.