The United Kingdom government has altered a scheme, without parliamentary discussion, by which a person can pay one million pounds to gain British residence and citizenship.

Under the new scheme, foreigners can borrow the one million pounds from the country's banks.

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The 'Passports for Loans' scheme is an extension of a plan introduced in 1994 by Michael Howard, then the Conservatives' home secretary and now leader of the party, a Home Office spokesman said on Sunday.

Howard attracted a barrage of criticism after he announced that anyone from abroad with one million pounds to invest in Britain would be given the right of residence.

At the time, Gordon Brown, now chancellor, said the Labour Party would repeal the scheme if it came into power.

However, the system has continued to thrive even under Labour, attracting an average of 26 millionaires every year, according to official figures.

Instead of having to offer one million pounds up front to gain British residence, rich foreigners will be able to borrow the cash from British banks as long as they can prove they have at least two million pounds abroad.

Home Secretary David Blunkett pushed the scheme through the House of Commons last week by using a ministerial order, which does not need debate.

"We felt it was necessary to carry out this change to keep pace with our competitors," a spokesman for Blunkett said.

Under the scheme, those accepted would be able to live in Britain for four years, then apply for indefinite leave to remain and the right to request a passport.