The IAS, which employs 300 people, has closed its 14 branches.

One employee told the BBC that staff had been told to clear their desks and that administrators were already in the central headquarters in London.

The free service is one of the leading charities giving legal advice and representation to immigrants and asylum seekers in England and Scotland.

From April 2009 until March 2010, the charity handled more than 24,000 cases, 14,462 of which were publicly funded immigration cases.

In a statement, the IAS said: "The government's reforms include the removal of immigration from the scope of legal aid, and a 10% cut in legal aid fees for refugees seeking asylum within the UK. Immigration accounts for around 60% of IAS's income.

"There are few organisations that could cope with the compound effect of removal of immigration from the scope of legal aid and a cut in fees for asylum clients."

To read more click here