The Prime Minister and Jack Straw, the Home Secretary, are privately drawing up plans to reverse the UK's opt-out of immigration law which is enshrined in the Amsterdam Treaty.
The controversial proposal would mean Britain abiding by asylum legislation agreed in Brussels, including an EU-wide definition of a refugee, the treatment of asylum seekers and the so-called "white list" of countries where no serious risk of persecution is considered to exist.
It will infuriate Eurosceptics who are already angry about Mr Blair's willingness to co-operate with the rest of Europe on issues such as defence.
However, the Government fears that if Britain is not involved in the European-wide legislation, it will end up as a favoured port for asylum seekers who may find it increasingly difficult to break through the ring of steel around the rest of the continent.
Britain is now the second most popular country in Europe with asylum seekers, behind Germany. More than 100 Romanian illegal immigrants were found in Kent on Friday having climbed into a lorry in Belgium.
Ministers believe that they could present the policy to right-wingers as an attempt to get tough on illegal immigrants by improving the scrutiny of applications. There is no suggestion that the UK would agree to common border controls.