Home Secretary John Reid said his head is "on the block" over his bid to overhaul the troubled Home Office.
Mr Reid has had to deal with a catalogue of crises
Senior Home Office civil servants will also face the sack if their performance fails to improve, he said.
Last month Mr Reid said parts of the Home Office were not fit for purpose as he faced a welter of revelations.
Mr Reid, who was speaking to his senior civil servants, has set up a task force to come up with firm proposals next month to shake-up the department.
He told them the current immigration, policing and criminal justice structures were designed to cope with the Cold War when movement was much more restricted and religious extremism suppressed.
'Out of touch'
The department has been hit by a series of problems, notably the release of more than 1,000 foreign prisoners without consideration for deportation, which led to the sacking of Charles Clarke as home secretary in May.
Senior staff have also admitted they have no idea how many illegal immigrants there are in the UK.
And Mr Reid has been embroiled in a row with judges over sentencing guidelines and policy for dealing with paedophiles.
Mr Reid gathered his senior Home Office civil servants together on Wednesday to update them on his plans for the department.
"We need to rebalance the criminal justice system so that people believe that it is truly on their side," he said.
"We need to make the immigration system fair and effective in managing immigration for the benefit of this country, the people in it and those who come here.
"We need to transform service delivery in the Home Office. I can't do any of these things - far less all of them on my own. We can only do it together."
A task force of 25 of the "brightest and best" were looking at ways at improving performance and next month Mr Reid will publish proposals which will focus on key areas of reform.
'Eye off the ball'
Meanwhile, in the Commons, the Tory leader David Cameron and Tony Blair clashed over the state of the Home Office at prime minister's question time.
Mr Cameron insisted that Mr Blair had had nine years to shake-up the Home Office and had introduced "countless initiatives".
He accused him of taking his "eye off the ball", of being "out of touch" and of not being the right person to sort it out.
But Mr Blair replied that during his time in power, crime had fallen and asylum claims were being processed more quickly.
The prime minister conceded the government needed to go further but he suggested Mr Cameron was trying to appear tough on law and order while voting against measures designed to tackle the problems.
Lib Dem home affairs spokesman Nick Clegg said: "Unless John Reid deals with the way the government has bombarded the Home Office with half-baked gimmicks and knee-jerk initiatives, he will not be able to solve the department's problems."
Shadow home secretary David Davis meanwhile said: "Never in the history of the Home Office has a home secretary made himself so culpable for so many mistakes in such a short space of time."
Earlier, former Immigration Minister Barbara Roche claimed there was a case for breaking up the Home Office - something Mr Reid has ruled out.
Chris Mullin, a former chairman of the Commons home affairs committee, called for calm and warned against "throwing all the pieces into the air and starting again".
Jonathan Baume, leader of the civil servants' union, the First Division Association, said Wednesday's meetings were about "taking stock" until an internal review was complete.
"There are very real and serious problems in parts of the Home Office, no-one is denying that," he said.
Mr Baume recently accused ministers of scapegoating staff and warned that issues of administration had to be kept separate from policy questions to avoid giving the unfair impression of a department in crisis.
Ex-Labour minister John Spellar welcomed Mr Reid's attempts, in his words, to "shake up this department from top to bottom".
He told the BBC: "It's partly about management but it is also about changing actually the whole psychology and mind-set - actually making it a can-do instead of a can't do organisation."