Sixteen Indians, including two unaccompanied children, caught hiding in the back of a lorry as they tried to enter the UK illegally through the port city of Hull are now claiming asylum, according to British police and the Home Office in London.

They were spotted on X-ray equipment in an Italian driver's vehicle by customs officials looking for contraband.

A Home Office spokesman said: "We can confirm 14 adults and two unaccompanied minors were detected at Hull on Sunday morning by customs and excise officers.

"They entered the UK by hiding in the back of a lorry. Customs and excise officers were using X-ray technology to find smuggled goods. Instead they found people. They are all Indian and have all claimed asylum. The two children are in the care of social services. They are not related to any of the adults. We are looking whether we can prosecute the driver, who is Italian, for the illegal entry."

The Home Office said those involved had been detained immediately after their discovery by the customs and excise officials and referred to immigration service officials.

Local police, who confirmed that 16 people had been detained on the dock on Sunday, said more details of the operation would be released today.

The news came as it was revealed that opposition Conservatives are drawing up plans to hold asylum seekers on foreign islands 'far far away' from Britain using offshore application centres to process their claims.

Shadow Home Secretary Oliver Letwin said the centres would be on foreign soil and not in British territories and that the exact locations would not be chosen until the Conservatives were in power.

A spokesman for Mr Letwin said: "It will definitely be a foreign territory. It won't necessarily be outside Europe but Mr Letwin has said it would be 'far, far away'."

Letwin has said the asylum system is costing UK taxpayers £1800 million a year and needs to be brought back under control to save money and restore public confidence.