By Dominic Casciani
BBC News community affairs
A national charity has pulled out of a key government plan to compel failed asylum seekers to work on community schemes or lose food and lodging.
Controversial scheme likened to community service for offenders
The YMCA said it could no longer support the scheme likened to community service handed down to criminals.
The charity had been under pressure from churches and refugee groups, some of whom had dubbed it slave labour.
The key plank of Home Office policy is now thought to be without any of the backers needed to become a reality.
Under the law, failed asylum seekers can lose automatic government support for food and shelter, although they can retain it if they cannot be sent home for reasons out of their control.
The Home Office wanted to compel failed asylum seekers to undertake community work in return for that continued support. Asylum seekers are banned from taking normal jobs.
The Liverpool pilot of the new "Section 10" rules would have seen the asylum seekers perform local clean-ups and other schemes.
YMCA England had provisionally agreed to run the scheme with 40 asylum applicants, mostly young Iraqis. The Home Office says it is too dangerous to send failed asylum applicants back to Iraq.
Richard Capie, spokesman for YMCA England, said: "We met with community groups and talked to them about how a pilot scheme might work. Following that meeting, we have decided not to run a scheme. We have also decided only to run a pilot elsewhere if it is voluntary.
"YMCA England has always had concerns about the compulsory nature of the legislation. Our intention was to run a pilot that would take the legislation into account but would focus on the needs and wishes of the individuals involved.
"Our consultations with community groups in Liverpool have demonstrated that this is not possible."
Richard Solly, spokesman for the Churches Commission for Racial Justice, said his organisation was one of those which had lobbied the YMCA to pull out.
"The only other people compelled to work are criminals," he said.
"We think asylum seekers should have the right to work because it is conducive to their dignity, mental health and can help overcome the [public] feeling they asylum seekers are somehow scroungers."
But a spokesman for the Home Office denied the scheme criminalised asylum seekers.
"The pilot scheme is not designed as a punishment," said the spokesman. "The pilot is designed to occupy failed asylum seekers purposefully and to enable them to perform useful tasks in return for our providing accommodation at the taxpayer's expense.
WHAT IS SECTION 10?
Failed asylum seekers lose support
Special allowances made for those who cannot be removed
New rules would have forced them to work
"We want to work with the voluntary sector, local people and organisations in Liverpool to make this pilot work. Home Office officials have met with local people and we will listen to their concerns."
Asked whether other organisations were offering to run compulsory work schemes, the spokesman said none had so far signed up.
Ewan Roberts of Asylum Link Merseyside, said the scheme raised "ugly spectres" of slavery from Liverpool's historic links with the trade.
"The Home Office said it wanted to give people the opportunity to put something back in the community.
"They fail to recognise the amount of voluntary work many asylum seekers already do and tried to present this as part of their agenda to improve community cohesion.
"A lot of good local work goes on - but then the government comes and stamps all over it by not treating asylum seekers as human beings."