Every job applicant must prove identity in illegal immigrant crackdown

Even native-born Britons will have to comply with the new Home Office rules, to avoid claims of race discrimination if foreigners are singled out for checks.

Ministers claim the move will "flush out" hundreds of thousands of illegal immigrants working in the black economy.

Firms will face penalties of up £10,000 for every illegal foreign worker they employ, even if they tip off the immigration authorities themselves.

Last night, business leaders accused ministers of penalising employers for the failure of Government immigration policy while adding to the mountain of red tape.

The new rules follow repeated and largely unsuccessful efforts by the Home Office to tackle the massive issue of illegal foreign workers.

Estimates of the number in the UK range from 570,000 to 870,000.

Employers are already obliged to check foreign workers' documents but the laws have proved difficult to enforce, with just 23 successful prosecutions in 2005.

The Home Office plans to boost the number of enforcement staff from 700 to 1,200 by next year, as well as launching a telephone documentchecking service to help employers determine whether passports and other papers are genuine.

Immigration minister Liam Byrne said: "What we are proposing here will, I think, flush illegal migrants out.

"We are trying to create a much more hostile environment if you are here illegally."

Matthew Knowles, of the Federation of Small Businesses, urged ministers to think again, saying: "It is surely unfair to ask businesses to act as immigration officials.

"Not only will these recommendations to check passports place an extra burden on small firms, who have no specialist human resources department to help or advise them, but it will also financially penalise businesses for the failure of the Government's immigration policy."