About 5,000 illegal immigrants were mistakenly cleared to work as security staff, the Home Office has said.
Ministers ordered fresh checks on all new security staff
The Metropolitan Police confirmed that some of those who were not properly vetted by the Security Industry Authority had been working for them.
Ministers ordered fresh checks on 40,000 people after it emerged the SIA was not checking applicants could work in the UK before granting licences.
The Conservatives described the Home Office as "still not fit for purpose".
According to the Sunday Mirror, illegal immigrants were also working at airports and ports.
Removal from UK
The government review of 40,000 security staff given licences by the security regulatory body over the past three years is expected to be completed by the end of the year, the Home Office said.
A spokeswoman for the department said about 5,000 illegal immigrants were estimated to have been identified by the review.
Anyone found to be working illegally would have their licence taken away and would face removal from the UK, the Home Office said.
It later emerged that staff employed by the Metropolitan Police through a contract company were suspected illegal immigrants.
A spokeswoman for the Metropolitan Police said after the force was informed in April that a number of people from a contract company might be working illegally they were removed from police work.
The contract company also suspended them until investigations were completed, she said.
The Met refused to say what jobs they had been undertaking, or how sensitive the positions were.
Shadow immigration minister Damian Green said: "What is extraordinary about this latest Home Office fiasco is that we have been through this before.
"Last year the Home Office discovered it was employing illegal immigrants as cleaners in the immigration department itself.
"From these new revelations it looks like no effective action was taken to check who has access to some of the most sensitive buildings in this country.
"It looks like the Home Office is still not fit for purpose."
Liberal Democrat home affairs spokesman Nick Clegg said: "Public confidence in the government's handling of immigration will take yet another hammering with this revelation.
"It is impossible to promote the merits of a fair and effective immigration system as long as the government mixes headline-grabbing populism with serial administrative incompetence."
Cabinet Office Minister Ed Miliband said the SIA introduced a new licensing system in July.
"(It) instituted the kind of checks we need on people to make sure they can be legally working in this country," he told BBC1's Politics Show.
"Now they are going to check existing employees from outside the European Union where there is a risk of them being employed illegally," he said.
"This is a responsibility on employers. Employers should not be employing people illegally."
Andy Drane, deputy chief executive of the SIA, said his organisation had previously relied on employers to check out their staff.
But when operations this year exposed problems with the system, the SIA changed its procedures "immediately", he said.
"The employer is responsible for ensuring that anyone it employs has a legal right to work in the United Kingdom," he told BBC Radio 4's Today programme.
Pressed on how big the problem was, he said: "I don't think there will be very many (illegals) working in sensitive areas.
"I think it's important to say that the people we licence work in a range of different sites - they could be door supervisors at nightclubs, they could be at shopping centres, they could be in factory estates and so on."
He added that airport security was separately regulated by the Department for Transport.