Maurice Wren, co-ordinator of Asylum Aid, said the proposed reduction from 40 to five hours in the amount of legal advice funded by the tax payer was "woefully short of a sufficient time for adequate representation on asylum cases".
The proposals from the Department of Constitutional Affairs have also been criticised by the UN high commissioner for refugees, who has protested in writing to Lord Chancellor, Lord Falconer.
Amnesty International UK said that the reduction in legal aid is the latest in a line of government measures designed to push official asylum figures down. "The curtailment of legal aid is part of a general onslaught against the basic human rights of asylum seekers by a government increasingly obsessed with meeting draconian targets," said Jan Shaw, refugee affairs programme director at Amnesty.
Refugee Action said that the Government's policy of deterrence was making it impossible for charities to provide basic services for asylum seekers.
"As the Government withdraws state support for asylum seekers, I can't see how the voluntary sector is going to be able to cope with the increasing levels of demand for even basic assistance and services," said a spokeswoman for Refugee Action. "Nobody seems to realise that these are people who have done nothing wrong."
Homelessness charities are also warning that current government policy is forcing more asylum seekers on to the streets.