Children of failed asylum-seekers will not be taken into care after the Home Office scrapped plans for a controversial new policy.

Under the new system, asylum-seekers not granted status and refusing to leave the country would have had their children taken away.

The U-turn comes after a pilot study involving more than a hundred families showed "no significant increase" in voluntary returns, according to a Home Office study published this week.

The news comes as a welcome relief to pressure groups who have vigorously campaigned against the legislation since its inception in 2004.

A separate report into the study conducted by The Refugee Council claims only one family left under the new section 9 ruling and that more than a quarter have gone underground.

Chief Executive of the council, Donna Covey welcomed the Home Office's decision:

"The policy wasn't working and it was causing a lot of fear and misery. We have long argued that refugee children are children first and that their safety and well being should take priority over immigration enforcement."

A home office spokesperson confirmed that a more efficient system is needed to deal with failed asylum-seekers:

"While we think it is important to retain a provision to withdraw support from families who will not cooperate with removal, we do not think it is appropriate for it to be used on a blanket basis."

The pilot took place in Leeds, Manchester and London and Richard McAndrew of the Leeds Asylum Seeker Support Network believes families should be afforded more protection:

"Families are an easy target because they're not so mobile, it's harder for them to leave. Having said that a number of families flee their accommodation and disappear out of the system.

"Who knows how they survive?"