They include failed refugees who should have been deported, and migrants whose claims were never even concluded by the Home Office.
Instead, their files were lost or left unfinished as the asylum system went into meltdown.
Now officials are finally wading through the backlog, and have already granted more than 50,000 approvals.
Based on the current rate at which cases are being rubber-stamped, the total number to benefit from the amnesty will be around 180,000.
The approval rate is 40 per cent and rising, with all those who are successful gaining access to housing and other benefits. Local councils will be expected to find homes for many of them.
The major reason why so many of the claims are being approved is the Human Rights Act.
Under it, those who have been here for many years can claim Britain is now their home and that they no longer have links to their country of origin.
If their claims had been considered when they were first submitted, many might have been sent home.
The HRA, passed by Labour a decade ago, also prevents the removal of asylum seekers to countries where they could face torture or persecution, which is likely to apply to thousands of cases in the backlog.
Shadow Home Secretary Dominic Grieve said: 'Whilst the Minister for Immigration tries to talk tough, the reality is that the Government is prepared to grant what amounts to an effective amnesty just to get the figures down.
'Despite all the spin, it is clear that Labour is no closer to getting a grip on illegal immigration.'
The 450,000 so-called 'legacy' cases were unearthed by former Home Secretary John Reid during a clean-up of the department he described as 'not fit for purpose'.
He said he wanted all the cases - some of which date back to the mid-1990s - resolved by around 2011.
Lin Homer, chief executive of the UK Border Agency, said that of nearly 130,000 cases concluded so far, 51,000 - or 40 per cent - had been approved.
A further 53,000 had been closed because, for example, the claimant could not be contacted. Only 23,500 applicants have been removed.
Town halls have been warned to make the migrants a priority for council housing. They have been given a 'transitional grant' of £1.1million of taxpayers' money to help towards the cost, but the final bill is likely to be far higher. It is expected to be passed on in council tax rises.
The list of countries with most beneficiaries of the 'legacy' policy is headed by Turkey, with 2,400 successful claimants.
Sir Andrew Green, chairman of the pressure group Migrationwatch UK, said: 'We are only now getting the measure of the disaster that befell the asylum system in recent years.
'It is frankly absurd that tens of thousands of people should be given full access to the welfare state for no other reason than the administrative chaos that ruled in the Home Office.'
It also emerged yesterday that seven of the most dangerous criminals involved in the foreign prisoner scandal have been given permission to stay in Britain. They are rapists, killers and paedophiles.
One of the main reasons for being allowed to stay is that under human rights law they have a right to a family life.
In total, out of 1,000 offenders involved in the Home Office fiasco, only 336 have been deported to date.
Tory MP James Clappison said: 'The fact that even the most serious criminals have been allowed to stay makes a mockery of Labour's original promise that they would be found and deported.'
The revelations, made in a letter to Parliament's home affairs committee, came as a study showed that allowing every illegal immigrant living in the UK to stay would cost £2billion a year. continues here
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