Deporting asylum seekers who cross into Britain on small boats will cost the government £6 billion ($7.5 billion) over the next two years, an internal report has said.
The Home Office will spend billions on detention facilities, accommodation and removals as ministers receive more powers to deport people under the Illegal Migration Bill.
The cost of housing of migrants in the UK is estimated to be £7 million a day, with officials now forcing room sharing to reduce costs.
The sharing of four to a room with two bunk beds led to protests by 40 asylum seekers, who staged a sit-down demonstration in central London on Friday.
The protest ended after the migrants were informed they would lose their free housing, food and money if they continued.
Robert Jenrick, the Immigration Minister, told the BBC on Sunday that the asylum system was "riddled with abuse" and required "robust reform".
He added that "landmark" deals with Albania and France had seen a 40 per cent increase in small boats being stopped before they reach the English Channel.
The new migration bill proposes to remove asylum seekers who arrive by small boats across the English Channel within weeks.
The removals will be either to their home country, or Rwanda, although this policy is being challenged in the courts.
Despite Prime Minister Rishi Sunak declaring the issue of stopping small boat crossing as a major political goal, there are growing concerns that the implementation is going to be costly and impractical.
The government hopes that the draconian laws will act as a deterrent to the thousands of migrants seeking sanctuary in Britain but the policies have also attracted deep criticism for their lack of empathy towards refugees.
Jon Featonby, the chief policy analyst at the Refugee Council, argued that the Home Office knew “so-called deterrence measures simply don't work”.
“It is preparing to detain thousands of desperate people who will end up on our shores in search of protection,” he said.
“Until refugees fleeing violence and persecution are given a safe pathway to seek asylum in our country, they will continue to risk their lives to get here.”
Asylum system annual costs will reach £3bn a year according to internal projections seen by the BBC, suggesting this figure will balloon if the migrants' bill becomes law.
A government spokesman said the legislation will help stop boats “by making sure people smugglers and illegal migrants” realise that entering Britain illegally “will result in detention and swift removal.”
He added: “Only then will they be deterred from making these dangerous journeys in the first place.”
The legislation has faced severe criticism in the House of Lords and also opposition from Conservative MPs, but the government is intent on pushing the bill through to demonstrate that it is strong on migration.
New figures published last month showed that Britain’s net migration had reached a record 600,000 with huge numbers of arrivals from outside the EU.
A key promise of Brexit had been to reduce the number of migrant arrivals.