Industry Minister Margaret Hodge said local people had a “legitimate sense of entitlement” that should override the needs of recent arrivals.

She wants social housing to be allocated on a points system which would give more weight to a person’s length of residence, citizenship and NI contributions.

Mrs Hodge said there was widespread concern about the changing face of Britain and ­people needed to be reassured.
She protested that the Government “prioritised the needs of a migrant family over the entitlement others feel they have to community resources”.

Mrs Hodge explained: “A recently arrived family with four children living in an overcrowded rented flat with the children suffering from asthma will usually get priority over a family who have lived in the area for three generations and are stuck at home with the grandparents.” Mrs Hodge, who pointed out that she was an immigrant, said many voters in her constituency of Barking, East London, had turned to the BNP because of concerns over housing.

Mrs Hodge was accused by the Refugee Council of fanning the flames of racial tension.

A spokeswoman said: “The way to counter some of the views put forward by the far-Right parties is not by following their lead.”

Liberal Democrat housing spokesman Andrew Stunell MP said: “Mrs Hodge has got a cheek. There are 1d million families on the housing waiting list and Labour keeps selling houses off. The first thing to do is build social housing again, not blame immigrants.” Mrs Hodge has been accused of clumsy interventions into racial debate before.

The needs of our local people should override those of the recent arrivals

Margaret Hodge

She was blamed for the BNP gaining council seats in Barking last year after she claimed eight out of 10 white voters there were tempted to support the party.

Shadow Immigration Minister Damian Green said: “Mrs Hodge is admitting the failure to control immigration. We want an annual limit so we can avoid the problems she is talking about.”

Mrs Hodge is married to judge Sir Henry Hodge, president of asylum tribunals, who has criticised the Government for failure to deport more illegal migrants.