A major immigration crackdown is to be softened amid a chaotic scramble by ministers trying to impress Andy Burnham.

The Home Office is poised to exempt tens of thousands of foreign care workers and their families from new rules that would force them to wait ten years before gaining the right to remain permanently.

The climbdown, which could cost the taxpayer billions in the long term, is being considered by Home Secretary Shabana Mahmood, who is tipped for a major role in Mr Burnham's administration.

But it was revealed in an unauthorised newspaper article by her junior minister Mike Tapp, who she is now trying to sack for disloyalty.

Home Office sources accuse the immigration minister of presenting the idea as his own to curry favour with Mr Burnham, who has indicated he is unhappy at the idea of applying retrospective changes to migrants already in the UK.

But in an extraordinary twist, Keir Starmer flatly refused Ms Mahmood's request to sack Mr Tapp, who is one of the Prime Minister's biggest cheerleaders – leaving the Home Office in chaos and shining a light on the current shambles in government.

Ms Mahmood yesterday ordered officials to effectively cut her junior minister out of the loop, barring him from seeing documents or holding meetings. Incredibly, Mr Tapp publicly taunted his boss, saying he would not bow to her 'intimidation'.

In a reference to his military service, he boasted: 'I've seen off the Taliban and taken out terrorists.'

Tory justice spokesman Nick Timothy said the situation was becoming a 'crisis of authority' for Labour and urged Mr Burnham to step in.

'This is all happening because ministers don't know what jobs they'll have when Burnham takes over – or if they'll have one at all,' he said.

'This is a total breakdown of authority and discipline in the Labour Party – from which it will be difficult to recover.'

The row has also lifted the lid on plans for an extraordinary climbdown on immigration. Ms Mahmood, who will place her Immigration and Asylum Bill before Parliament on Tuesday, announced a crackdown last year which would double the length of time someone has to live in the UK to gain indefinite leave to remain from five years to ten.

She said the move would be applied retrospectively to prevent a flood of claims from the wave of migrants who arrived after the pandemic. The plan triggered a major Labour backlash.

Angela Rayner dubbed it 'un-British', while Mr Burnham suggested it could leave hundreds of thousands of people 'in limbo'.

Mr Burnham, who is set to be PM within weeks, is expected to insist on a series of concessions to exempt some groups of migrants from the new rules. This could be decided on the basis of their contribution to the public sector, such as health and care.

The retrospective element of the reforms could even be abandoned altogether, although the Home Office last night insisted this was not the case.

Mr Tapp revealed that the Home Office was looking at plans to exempt a 'cohort' of more than 600,000 people who arrived on the health and care visa route which has since been tightened up.

In the wake of the pandemic, foreign care workers were allowed to bring their families with them. In 2023 alone, 120,000 so-called 'dependants' arrived alongside 100,000 care workers.

Officials believe around 200,000 of those involved will apply for permanent settlement between now and the end of the decade if the five-year rule is unchanged, giving them the right to claim benefits. Separate analysis by the Home Office and its migration advisory committee suggests they will cost the taxpayer more than £100,000 each over the course of their lifetimes – potentially totalling £20billion.

In his unauthorised article for The Times, Mr Tapp said he had been working to 'develop a better approach than a blanket retrospective extension from five years to ten years for everyone'. A Home Office source said he had 'taken possible ideas that the Home Secretary and her team were working on and briefed them as his own to try to win a job in the new administration'.

Shadow Home Secretary Chris Philp said the plans shouldn't be watered down. 'People who were allowed into the UK temporarily to work should not be allowed to stay for ever unless they are in high-wage jobs,' he said.

'If they are not in high-wage jobs then they should be required to leave at the end of their visa.

'We'll soon find out if Andy Burnham has the courage to stand up to his Left-wing, open-borders MPs, or if he weakly capitulates like Mike Tapp.' The row has also highlighted the collapse in trust between Sir Keir and Ms Mahmood, who enraged the PM when she told him to quit last month.

A No 10 spokesman said: 'Mike Tapp has been reminded of his obligations under the Ministerial Code including collective responsibility and procedures relating to the clearance and presentation of government policy.'

Mr Tapp, who has flown to San Francisco for a wedding this weekend, last night apologised for his Taliban reference, adding: 'I have a lot of respect for the Home Secretary.'