The Government’s sweeping asylum reforms and plans to send migrants to Rwanda could cause a “system meltdown” costing the taxpayer billions of pounds, campaigners have warned.

The Refugee Council called for immigration laws to be repealed to avoid catastrophe as it estimated recent changes to the system may end up emptying the public purse of up to £17.1 million a day – or around £6.2 billion a year – in accommodation costs alone.

The charity also suggested 115,575 asylum seekers could be stranded in a “permanent limbo” by the end of 2024.

It comes as Rishi Sunak’s Rwanda Bill formally became law after receiving royal assent, paving the way for deportation flights to get off the ground.

Parliament passed the legislation earlier this week, just hours before news emerged of another tragedy in the Channel when five migrants died trying to make the journey to the UK.

Under the Illegal Migration Act which became law last year, migrants are banned from applying for asylum as their cases are deemed “inadmissible” by the Government. The law also puts a duty on the Home Secretary to arrange for their removal from the country, though this element of the legislation is yet to be brought into force.

In a report published on Thursday, the Refugee Council said despite this duty, “in reality only a small proportion are ever likely to be removed to their own country or Rwanda”, adding: “The vast majority will be left in permanent limbo in the UK, stranded with their claims never being processed. They will be left either being supported indefinitely by the Home Office or being at risk of exploitation.”

Chief executive Enver Solomon said the charity’s calculations indicate “the immense cost, chaos and human misery that the Illegal Migration Act and Rwanda plan will unleash”, adding: “It will lead to another entirely avoidable system meltdown. Instead of operating an effective and fair asylum system, the Government has recklessly brought in this misguided legislation without any apparent thought to its staggering costs and long-term consequences.

“Rather than laying the foundations for the next asylum crisis, any Government that wants a fair and efficient asylum system should repeal the legislation, stop wasting resources on futile endeavours and focus on the vital task of processing asylum claims promptly and fairly.”

Labour’s shadow home secretary Yvette Cooper branded the Government’s asylum policies “a farce”, adding: “With every new law they pass, they are just making the chaos worse” before accusing ministers of choosing “gimmick over grip”.

The charity considered average numbers of asylum applications and current costs for accommodating migrants among a range of other factors in its calculations.

Its estimations were based on assumptions the Rwanda plan would be put into action by July as the Prime Minister indicated on Monday but that it will not curb the number of people trying to seek asylum in the UK because as yet there is no evidence that the policy will have the desired deterrent effect.

The analysis also assumes that all provisions under the Illegal Migration Act are enacted.

A Home Office spokesperson said:“Ahead of the Illegal Migration Act coming into force, we are removing thousands of illegal migrants to their country of origin.

“Many of this cohort will be in scope for removal to Rwanda, which is an uncapped scheme, and can expect to be served removal notices in due course.

“As the Prime Minister set out this week, flights to Rwanda will take off in ten to twelve weeks, creating the deterrent needed to end the criminal exploitation of migrants by the people smuggling gangs.”