An identity card system is the only way employers are going to be able to tell if a person is entitled to work in the UK, according to Immigration Minister Beverley Hughes.
The ID card divides ministers
She says there are currently "holes in the system" which mean employers are falling foul of the law by taking on illegal workers either "knowingly or unknowingly".
She also blamed courts for not taking the situation "as seriously as they might".
Mrs Hughes pushed the argument for ID cards during her evidence to the Home Affairs Committee, which heard how illegal migrants from China had been found working in Kings Lynn.
Home Secretary David Blunkett has already said that he wants to press ahead with an ID card scheme - despite reported discontent about the plan within the rest of the cabinet.
John Denham, chairman of the committee and a former home office minister, raised the issue again during the hearing on Tuesday.
He asked Mrs Hughes how people were expected to believe that operations, such as the one that detected the Chinese workers, were worthwhile when people were not being removed and employers were "getting away scot-free".
He challenged her to say whether any employer who knows they are employing illegal labour "will expect to be caught" and prosecuted, rather than "be patted on the head for cooperating with the authorities once problems come to light".
Mrs Hughes said she did not accept the "parody" of the government's attitude to these employers, arguing that the issues were "complicated" and identification was an issue.
She said that the illegal immigrants from China were now being closely monitored, adding that an expert team from China would be addressing the issue next month.
"There is also a view that the courts haven't taken this as seriously as they might," said Mrs Hughes.
In one case, an employer taken to court on 12 counts of employing illegal workers, who could have faced a £5,000 penalty for each of them, received a fine of £12.50, she said.
This prompted Mr Denham to ask: "Isn't the truth that until there is a robust and reliable system of entitlement cards that people have to show and employers can rely on... we are going to continue to have abuse?"
He asked whether proposals for an ID card were likely to be brought forward "very, very quickly" because "I can't see how else we're going to tackle some of these problems".
The minister said the home secretary believed that to tackle illegal working the UK needed "a secure identity system which includes that information on a person's identity card".
While she could not say what decision the cabinet was likely to reach, work was currently going on to assess the cost-benefit of introducing a scheme, she said.
"At the moment there isn't a single robust form of identification that also gives proof of right to work," she said.
"There are holes in that system that either knowingly or unknowingly employers fall foul of and an identity card is really the only way that we can see that we can provide such a secure system that would enable employers not to exploit the statutory defence that at the moment they have."
Prime Minister Tony Blair has already said he thinks ID cards are a good idea "in principle" in a world with massive cross-border migration and high levels of benefits fraud.
But there have been a number of reports of cabinet ministers opposing ID cards on both cost and civil liberty grounds.
Ex-Tory cabinet minister Ann Widdecombe said "nothing short of detention" would stop illegal workers from disappearing.
But Mrs Hughes urged her to "get real".
"If you are seriously suggesting that every person that we apprehend could be detained... you are going to need a very, very large expansion, at great expense, of the detention estate."
The minister said this was not a reasonable demand on resources and the government's other priorities.