Asylum applications fell 41 per cent last year to 49,370 compared with the previous 12 months, according to Home Office figures published today.
The figure excludes dependants. Including dependants such as children and spouses, the figure was 61,050 for the year, compared with 103,080 in 2002.
In the final three months of 2003, there were 10,830 new asylum seekers - down 9 per cent on the previous three months and down a massive 52 per cent on the same period in 2002.
Home Secretary David Blunkett said: "These figures show the very significant progress that has been made in dramatically reducing the number of asylum seekers entering the UK last year as a result of the tough reforms we have put in place."
For the first time, Mr Blunkett pledged that asylum costs will begin to fall "soon". But he published new figures showing the 2003/4 budget for immigration and asylum would rise to £2 billion, up from previous estimates of £1.783 billion.
"The progress we are making will soon begin to bring down the costs of asylum support," he said.
"The last three months of 2003 show applications for support down 60 per cent compared with this time last year.
"However, a small increase in capital costs this year has been necessary to increase detention capacity for the new removal centre at Heathrow and to enhance border controls."
The annual 41 per cent fall in the UK was nearly four times the average across the rest of the EU, a Home Office spokesman said.
The number of failed asylum seekers who were deported in 2003 increased by 23 per cent to 12,490 (17,040 including dependants).
Mr Blunkett said a series of steps was being taken to "maintain the momentum", including a new 330-bed removal centre at Colnbrook near Heathrow which will open in August.
The UK was also the first country to reach agreement with the Coalition Provisional Authority in Iraq to begin returning 30 failed asylum seekers a month from April, including both voluntary and compulsory repatriations, he added.
Mr Blunkett said: "This has not been easy. When the majority of asylum seekers destroy their documentation, removing them presents us with a major challenge - we cannot adopt a fantasy policy of parachuting people out of planes.
"Instead, we are systematically working to overcome the barriers.
"We are the first country in Europe to negotiate a returns agreement with Iraq, India and Sri Lanka and we have reached agreement to enable the return of a small number of people to Somaliland.
"Sometimes the numbers returned are low to begin with, but our evidence shows that even a small number of returns deters others from travelling to the UK."
As announced yesterday by immigration minister Beverley Hughes, a new focus will be on applications from Somalia.
Somalis made up the largest nationality in applications in the last quarter of 2003, with 1,245 new claims - making them the top nationality for the third period in a row.
Ms Hughes said yesterday that immigration officers will begin targeting people of Somali origin at ports to establish the full extent of this problem and prevent further asylum abuse.
They will also check the fingerprints of all asylum applicants from Iraq, Iran, Sudan, Somalia and Turkey against other EU countries' own databases to identity other "asylum shoppers".
The Government had already met its commitment to halve the number of applications from a peak of 8,770 a month in October 2002, before tough measures in the Nationality, Immigration and Asylum Act came into force.
In 2003, 6 per cent of applicants were granted asylum, 11 per cent were granted some other form of leave to remain and 83 per cent of claims were refused, although a fifth of those were granted some form of leave to remain in the UK at the first stage of appeal.Reuse content