Nicholas Scott, Minister for Social Security, promised that a joint force of Employment and Social Security officials would ensure that the travellers only received benefit payments if they satisfied the normal criteria of being 'available for work' .
The move was hastily announced in response to the wave of protests by MPs which came after social security staff handed out claim forms to travellers at an illegal camp at Kerry, Powys, last week.
John Major made it clear to ministers earlier this week that he wanted urgent action on the issue.
The Home Office is also reviewing public order and trespass law to see whether further controls on movement and encampments of New Age travellers can be strengthened. The Department of the Environment is considering changes to the 1968 Caravan Sites Act.
Mr Scott said the new team would 'co-ordinate information on the travellers and make sure that the availability of work criteria are fully satisfied before a penny of benefit is paid out'.
It would build up 'a benefit history of so-called New Age travellers so that their claims can be judged on the same basis as claimants who regularly use one office'.
Mr Scott added: 'I share the concern of the public at the sight of this invasion of land and the prospect of intimidation in and around our benefit offices.'
Officials said last night that details would be worked out at meetings with senior benefits agency and employment staff this week. But the goal appears to be to build an intelligence network which forewarns officials of travellers' destinations; then ensure that enough staff are put into affected local offices to process claims rigorously with computerised benefits data and establish whether they are justified under official regulations.
Officials may insist that travellers disperse to different offices to make the claims in the affected area to minimise disruption in local towns.
Although most of the protests made to ministers have come from Tory MPs, some Labour MPs have also complained, among them Frank Field, chairman of the Social Services Committee, who said: 'The same rules should apply to these hippies as apply to my constituents who do not have social security vans turning up to pay them. The rules of availability for work are ruthlessly applied to my constituents and they should be applied to the hippies as well.'
The Home Office has already made it clear it is examining section 39 of the Public Order Act, which created the offence of aggravated trespass. Under the Act, trespass is only a criminal, as opposed to civil, offence where force is used to enter private property. But some politicians would like it extended to include the use of private land by travellers and others.
The Home Office is also considering whether amendments should be made to sections 12 and 13 of the Act, which deal with police powers to divert or forbid processions.
The Department of the Environment is cautious about whether proposed revisions of the Caravan Sites Act, which obliges local councils to provide sites for bona fide gypsies, would make much impact on containing the New Age travellers.
But there are also serious worries among gypsy representatives that any move to limit the act, or scrap the obligation altogether, would have 'horrendous' consequences of driving people from areas which do not provide adequate sites to those which are less discriminatory.
The law presently allows local authorities to apply for 'designated' status, making it a criminal offence to camp anywhere other than on official sites. Gypsies argue that several authorities have been 'designated' without providing enough, or in some cases, any sites.