A total of £36 million has been paid out to failed asylum seekers to enable them to set up businesses back in their own countries, it was reported.
More than 23,000 migrants have received payments of up to £4,000 each under the Voluntary Assisted Return and Reintegration Programme since it was set up in 1999, said The Sunday Telegraph.
It let them set up businesses from market stalls to clothes factories in countries as diverse as South Africa, China and Colombia, the newspaper said.
The details were contained in documents from the Geneva-based International Organisation for Migration, which administers the scheme on behalf of the UK Government.
The Home Office said that the programme - which is part-funded by the EU - offered good value for money compared to forcible returns, which cost £11,000 for each failed asylum seeker.
"Last year we removed more failed asylum seekers than ever before. We will not hesitate to use enforced returns, but when we can spare British taxpayers the £11,000 these each cost, we will," a spokesman said.
"Repatriation assistance isn't new and frees up money to hire more immigration officers."
However, the payments were condemned by shadow home secretary David Davis, who told the newspaper: "Now the price of the Government's failure to secure our borders is all too clear.
"Given their inability to deport illegal immigrants, they have had to resort to bribing them to leave - with the taxpayer picking up the bill."
The disclosure comes as the Government is preparing next week to announce new curbs on foreign visitors from outside the European Union coming to Britain.
