There may be a case for permitting some failed asylum seekers to work legally in the UK, the home secretary has said.
Mr Clarke admitted anti-terror rules had 'reduced' civil liberties
In a special debate on home affairs on BBC Two's Newsnight, Charles Clarke said such a move may be worthwhile when would-be refugees cannot be deported.
Shadow home secretary David Davis said: "There are millions of would-be refugees in the world. We can't take all of them, we can take a fair share."
The Lib Dems' Mark Oaten said he would not put a quota on genuine refugees.
The three were set alongside each other for the special pre-election debate on terrorism, immigration and crime issues.
Mr Clarke told the programme, broadcast on Tuesday night: "There might be a case for some of the people who are failed asylum seekers but can't be returned to their country for a variety of reasons whether work could operate in some of these cases."
He was responding to a question from a member of a specially-selected, 150-strong audience, who suggested immigrants would better integrate into British society if they paid tax and National Insurance.
Asylum seekers are currently banned from working.
Some groups claim that changing the rules could become a "pull factor" attracting larger numbers of would-be refugees to the UK.
But the government has begun work on schemes to force failed asylum seekers to do unpaid work.
The audience was selected to represent regional and political bias
Mr Clarke also acknowledged that some counter-terror measures "reduce" some of the UK's long-standing civil liberties.
On the way stop-and-search is used by police against the Muslim community, he said: "Some of the civil liberties we have established over many years are reduced in certain respects."
On whether freedoms should be eroded in the name of fighting terror, he added: "Some people say 'No, never' and some people, in my view, say 'Yes' because we do have to protect ourselves."
Conservative home affairs spokesman David Davis agreed that the United Nations High Commission on Refugees (UNHCR) was opposed to his party's plans to back out of international treaties on the way nations must handle refugees.
"Bureaucrats do try to protect the treaties that they administer," he said, "It's not surprising that the UNHCR takes that view."
But, he added, it was important to deal with the impact of immigration on Britain's public services.
"We want a system which actually focuses on being fair to asylum seekers and on the immigration front helping the economy without putting unnecessary pressure on services," he said.
Questioned on the Liberal Democrats' unwillingness to impose an upper limit on immigration, Mr Oaten said: "I'm not going to put a quota on them if they are genuine refugees.
"I'm not going to send them back to somewhere they would be persecuted."