Chancellor Gordon Brown has defended beleaguered Home Secretary Charles Clarke as an "honourable man".
Home Secretary Charles Clarke has faced mounting pressure
Mr Clarke is under pressure to say if a foreign terror suspect was allowed to stay in the UK after release from jail.
If true, it would be "an unforgivable failure to protect the public against the most serious threat", shadow home secretary David Davis said.
The man served a prison term for robbery and was released in 1998, but there are no records about deportation.
The Home Office said it only started keeping detailed records of deportation in 1999, so had no records of whether the terror suspect was recommended for deportation.
The Liberal Democrats' Nick Clegg has also called for urgent clarification.
But as opposition parties called for the home secretary's resignation and amid a cabinet reshuffle, the chancellor defended Mr Clarke.
He refused to comment on the reshuffle outcome but said: "Charles Clarke is a very honourable man, he has dealt with problems in education and in the Home Office before.
PRISONER ROW CASES
1,023 released in 7 years
At least half most serious on run
79 most serious 'deportation considered'
32 of those 'accounted for'
574 of 1,023 'deportation considered'
Deportation action in 446 cases
Source: Home Office
"I think his announcement earlier this week about the presumption that people will be deported is a very significant point of policy.
"And I do believe he is facing up to this challenge of linking the prison service, the police service and of course the deportation work that is done by the immigration and asylum service.
"We're in a world of rapid change in these issues, and yes, we've got to prove that we can deal with these issues, but we're dealing with today's problems and not yesterday's problems."
Under pressure over missing foreign prisoners, Mr Clarke has announced that deportation law will be toughened to introduce the principle that foreign nationals who commit a crime, should "expect to be deported".
Human rights campaigners and some lawyers have criticised the move, saying the law is already tough enough.
The terror suspect aspect first emerged in a blog by political editor Martin Bright in the New Statesman.
The man arrived in Britain in the early 1990s as an asylum seeker and was given exceptional leave to remain. He was convicted in 1996 of taking part in a robbery and was freed two years later.
A Home Office spokesman said it was unlikely a recommendation on deportation would have been made as he was under 18 at the time of sentencing.
The probation officers' union Napo said risk assessment of prisoners was "not an exact science".
Government figures show the Home Office allowed 1,023 foreign prisoners to be released, over seven years, without being considered for deportation.