Plans for a giant cruise ship to house asylum seekers near Liverpool have been scrapped after being declined by port officials.

A government source has told Sky News the vessel was due to house 500 men seeking asylum in Birkenhead, but that will no longer happen following objections from Peel Ports.

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The ship was one of seven new sites announced by the Home Office under controversial plans to start transferring migrants from hotels in a bid to crack down on illegal immigration.

Local politicians, including Tory MPs and councillors, have raised objections to the sites operating in their areas.

But last week Rishi Sunak insisted that his plan to “stop the boats” was “starting to work” as he revealed two more giant vessels will be used for migrant accommodation, on top of the Bibby Stockholm which is due to arrive off the coast Dorset in the next few weeks.

The prime minister declined to say where the two new barges would be moored, but there had been speculation that the vessels could be moored near Liverpool.

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The rejection comes after permission to berth a barge housing asylum seekers at an east London docks was also refused.

London’s Royal Docks said it had informed the Home Office last month that water beside City Airport would not be appropriate as a potential location to moor one of its floating accommodation vessels for refugees.