The measure, which could lead to the closure of up to 100 law firms, follows a report by the Legal Aid Board, which revealed that solicitors were not only giving bogus advice but touting for business outside airports and docks.
Some London firms were aggressively signing up Eastern European refugees as they arrived in Dover, and a number overcharged by up to 50 per cent.
Home Office officials are said to be investigating more than 38 law firms and many more immigration consultancies involved in arranging "paper marriages" and other bogus asylum-related work.
Under new rules, legal advisers will have to pass tests on their knowledge of complex immigration law to weed out "cowboy lawyers" and stop them undertaking legal aid work at taxpayers' expense.
The inquiry also heard of cases where solicitors told clients to lie about their age because they would qualify for more benefits if they were classed as children.
Four immigration law firms have been taken over by the Office for the Supervision of Solicitors and six others are being investigated for suspected malpractice. Some 15 firms have been ordered to reduce bills because of alleged over-charging, though some are appealing.
Lord Irvine, who commissioned the investigation, said the report confirmed the Government's suspicions that immigrants and asylum-seekers as well as the legal aid system were being exploited by unscrupulous advisers. Lord Irvine said: "What we now have to do in the provision of publicly funded legal services is provide them only through quality- assured suppliers.
"The days must go when if you have a case which was entitled to legal aid support you can go into any solicitor's office anywhere in the country and he or she can take your case through the system regardless of whether he or she has the expertise to do so."
Spending on legally aided immigration work has risen in the last year, from pounds 36m to pounds 48m. About 100 firms now operating may not meet the standard and will be denied contracts for legal aid work.Reuse content