Lib Dems say 600,000 illegal migrants 'should be allowed to stay'

Nick Clegg, the party's home affairs spokesman, said up to 600,000 foreigners who had dodged the authorities for ten years could be permitted to stay in Britain.

He risked angering British workers whose jobs have been taken and wages undercut by new arrivals by insisting immigration was "not too high".

Outlining a scheme for managed migration, Mr Clegg said illegals who had never committed a crime and were devoted to Britain had "earned" their right to apply for citizenship.

Granting an amnesty to migrants who had lived and worked outside the law for more than a decade would inject £1billion a year in unpaid taxes into Treasury coffers, he said.

But critics warned the sum would be dwarfed by the vast amount paid in handouts to the new citizens, including child support and housing benefit.

Labour and the Conservatives called the proposals 'unnecessary' and "irresponsible", warning it would turn Britain into a magnet for illegal immigrants.

Mr Clegg - tipped as a future Lib-Dem leader - gave his keynote speech to the annual conference in Brighton as the party battled to shift the focus away from sniping at Sir Menzies Campbell's stewardship.

Candidates for "earned legalisation" would be required to meet a series of conditions, including passing a "public interest" test, a test on customs and institutions, and proving they could speak and understand English or Welsh.

If successful, they would begin with a two-year work permit before qualifying for full citizenship.

They would be made to pay a charge - possibly of several thousand pounds - or do community service.

Mr Clegg said it was "absurd fantasy politics" to spend billions on the mass deportation of illegal immigrants, especially when the Government did not know where most lived.

Instead, the money would be better used on a tough new border police force to focus on tackling people traffickers and catching illegals sneaking into Britain on lorries, boats or trains.

But last night Mr Clegg was forced to admit he had no idea how many illegal immigrants would apply for citizenship or how it would be possible to prove they had been in Britain ten years.

Campaign group Migrationwatch UK warned that an amnesty for some illegals would incur costs of £1.8billion a year, based on a report by Left-leaning think tank the Institute for Public Policy Research.

Immigration minister Liam Byrne said: "I believe those here illegally should go home - not go to the front of the queue for jobs and benefits."

Damian Green, the Tory's immigration spokesman, said the LibDems were living in a "fantasy world".

He said: "This will send out a message that Britain's borders are well and truly open to everyone in the world."

Sir Menzies Campbell's woes worsened last night after a straw poll in Brighton revealed that eight out of ten voters thought ex-Home Secretary John Reid was Liberal Democrat leader.

Passers-by were asked to pick out the LibDem chief from photos of Sir Menzies, Mr Reid, comedy character Victor Meldrew and ex-PM Alec Douglas-Home in the survey carried out by Channel 4 News.

• Radical plans to slash "goldplated" pensions paid to public sector workers were unveiled yesterday by the Liberal Democrats.

Headteachers, doctors, NHS executives, senior civil servants, MPs and judges would face having "inappropriate" final-salary retirement pots axed, and millions more public sector employees could be forced to work until they are 65 to retire on a full pension instead of quitting at 60, said the party's pensions spokesman Danny Alexander.

Delegates at the annual conference supported setting up an independent commission on pensions provision. Lower-paid nurses, police officers, fire service personnel and town hall workers would not be expected to be affected by the reforms.