"A £1 million pilot project to help failed asylum seekers return home was "mismanaged from start to finish" and resulted in just one family leaving the UK, according to a report published today.

The scheme, which was intended to reduce the number of children held in detention centres each year, failed because of a "flawed" approach by the Home Office.

The Children's Society said that the Government was not clear on what it sought to achieve. Lisa Nandy, of the society, said: "It wasn't clear what the UK Border Agency was trying to achieve with the project, which caused considerable confusion from the outset."

The pilot project in Kent was started in response to criticism over the number of children being detained while attempts were made to remove their families from the UK. Families who had reached the end of their asylum claims were moved to an open residential unit and their children went to local schools while efforts were made to return them home.

An estimated 260 families were expected to use the facility after it opened in November 2007, but the scheme dealt with just 13 families and only one of them returned home.

The first family did not arrive until January last year and the pilot ended a month early.

The Children's Society report, which evaluated the project, said that referral criteria were unclear, leading to unsuitable families being sent to the centre by the UK Borders Agency.

Many were referred too late in the asylum process and had laid down roots, enrolled their children in schools and had established a routine of normal life, it said. As a result, they were allowed to return to the community.

It also said that the project was not well publicised, which led to confusion at the UK Border Agency about its purpose.

Ms Nandy described the project, known as the Millbank pilot, as a "missed opportunity" and said that its design, which involved coercion and confusion about referrals, was flawed.

The report found that there was a "climate of fear" within the centre and that the "threat of destitution for those who did not agree to move . . . meant the families who went did so under duress".

It described the process of moving families into the centre as "traumatic" and said that it involved "serious lapses in communication and confidentiality".

Phil Woolas, Border and Immigration Minister, said: "The Children's Society and other lobby groups have pleaded with the UK Border Agency to pilot alternatives to the detention of children. This is exactly what we are doing.

"The lessons we learnt have been used to design a new pilot currently running in Glasgow. This demonstrates our commitment to keep exploring alternatives to detention which increase voluntary returns and provide value for money to the taxpayer.

"This is a complex issue with no one-size-fits-all remedy, which is why these pilots are so crucial."

Keith Vaz, the chairman of the Commons Home Affairs Committee, said that the pilot had been "a waste of money" because it was applied to families who had been in the UK waiting for a decision on their asylum claim for as long as 10 years, rather than intervening earlier in the process.

Mr Vaz told the BBC Radio 4 Today programme: "There were good intentions, but the intervention happened too late. After you have been sat waiting for your case to be dealt with in a very long queue over a number of years, the last thing you want to do, the last thing you want to happen, is for someone to help you to leave."

Damian Green, the Shadow Immigration Minister, said: "The Home Office spent a lot of our money on this project and didn't only waste that money, [it] wasted the opportunity because, I think, finding alternatives to detention so you're not locking up children for weeks and weeks on end is a good idea. They just messed it up."

Sandy Buchan, chief executive of Refugee Action, said: "While it is clear that there were problems with this scheme, the principles that underpin it are sound. This was an attempt by the Home Office to manage asylum applications outside of the detention system, and particularly to spare children the trauma of being detained.

"We would like to see the Home Office and agencies and charities that work with asylum seekers learn from the experiences of this scheme and continue to find alternatives to detaining asylum seekers and pilot other projects.""

Article on the Times website