The agency is the first to have been stripped of its Charter Mark, which recognises high levels of customer service.

The scheme was launched by the previous Conservative government.

Jane Peel reports: "The Passport Agency became the first to suffer the humiliation of having this prestigous status withdrawn"

The Passport Agency has held its Charter Mark since 1992.

But a panel from the Cabinet Office, which oversees the scheme, said the standards of the agency had slipped badly since then.

Dr Jack Cunningham, Minister for the Cabinet Office, said customers had "not been well served" by the Passport Agency.

"The Agency's service has clearly fallen far below the required Charter Mark standard. In the circumstances, the judging panel felt they had no alternative but to withdraw the award," said Dr Cunningham.

Emergency measures

The panel said it recognised efforts made by the agency to make up for the current backlog in passport applications but said it had a long way to go to re-achieve the standards of excellence required by holders of the award.

In May, passport offices around the country introduced emergency measures to ensure holiday-makers got away on time. Extra staff were taken on, and all employees were told to prioritise applications according to date of travel.

Problems with a new computer system and new regulations requiring children travel on their own passports, led to backlogs of 10 weeks or more at some offices.

Liverpool, Newport and Belfast were among the worst-hit offices. In Liverpool, some customers queued up in the streets all night to have their applications processed.

Aim to regain award

Chief executive of the Passport Agency, David Gatenby, said he very much regretted the loss of the Charter Mark and was committed to working to regain it.

"I understand why this was considered to be necessary.

"We have been proud of being a Charter Mark holder and will be working alongside the Charter Mark Policy Team to bring our standards as soon as possible back to levels which will allow us to regain the award.

"Our customers have not received the high standards of service they rightly expect of us - and which we expect of ourselves - for which I apologise."

Mr Gatenby said the backlog had been cut to 420,000 applications, with a record 160,000 passports being issued each week. Application turn-arounds should be back to 10 days by late September, he said.

Government minister 'undermined'

In 1996 British Gas voluntarily relinquished its membership of the scheme before it could suffer the humiliation of having the award taken away.

The Conservatives said the announcement undermined the position of immigration minister Mike O'Brien just days before the expected government reshuffle.

Tory Home Affairs spokesman David Liddington said: "Under last Conservative Government the Passport Agency was awarded its Charter Mark for demonstrating excellence in public service.

"In two years, ministerial bungling and mismanagement of the worst kind has brought the entire agency to the point of collapse.

"Mike O'Brien might like to think that he has weathered this storm and that his ministerial credibility is intact just days from a rumoured reshuffle.