More than 200 of the 1,019 foreign prisoners released without being considered for deportation are to be allowed to stay in Britain after all, MPs were told yesterday. The Home Office's most senior immigration official, Lin Homer, also said that eight of the most serious offenders who were released had still to be found and the police were about to launch a "case by case" publicity campaign to trace them.

"To the best of my knowledge, we have not achieved the detention of these people," said Ms Homer, director-general of the Immigration and Nationality Directorate. She added that she felt she had let down Charles Clarke over the foreign prisoners scandal that led to his sacking as home secretary and admitted that it would take "years, not months" to get the directorate working properly.

She confirmed to MPs on the Commons home affairs select committee that the new home secretary, John Reid, had ordered a fundamental review of the way the Home Office - including the IND - operates to make it "fit for purpose". A report would be made within six weeks. It is expected that the IND review, to be carried out by Ms Homer, will consider one of Mr Reid's favoured options - transforming it into an arms-length Whitehall agency.

But the head of immigration irritated MPs when she said she was not able to provide precise figures for the number of foreign prisoners who had been released on bail or were held in special hospitals under mental health legislation until a fresh audit has been completed.

John Denham, the former Home Office minister and committee chairman, criticised her inability to provide hard facts. He said it was extraordinary she could not provide "very basic pieces of information" about the outcome of bail applications by those involved.

Her caution was provoked by the fact that two weeks ago Mr Reid was forced to apologise to the same committee after he had mistakenly told it 11 offenders were in prison when they had been freed on bail. A senior civil servant is now on "gardening leave" pending an investigation of how the home secretary came to give MPs misleading information.

Ms Homer, a former chief executive of Birmingham city council, who took over the IND job a year ago, said that the cause of the foreign prisoners crisis was "a near classic case of demand outstripping supply" in a casework unit run by managers at a "relatively junior level".

"They were not dealing with cases that were coming in through the door. Those on which work had not been concluded were being filed rather than put back in the queue," she said, adding later that 150 staff were now dealing with the problem, compared with 30 before. The extra staff had been taken off asylum and managed migration work to deal with the foreign prisoners crisis.

She said that so far an initial decision had been taken not to deport more than 200 foreign prisoners out of the original 1,019 cases who had been released without being considered for removal. Tony Blair has promised legislation to ensure that there is a legal presumption that foreign prisoners will deported at the end of their sentences.

Ms Homer said that generally deportation orders were made in about 60% of cases, but she could not tell MPs how many had actually left the country.