Smith denies 'blunder' on checks
Ms Smith has the prime minister's full confidence
Jacqui Smith has defended a decision not to publicise the fact that 5,000 illegal immigrants were cleared to work in security, amid claims of a cover-up.
The home secretary denied there had been a "blunder", promising that the government would take "robust action".
Leaks revealed Ms Smith knew about the problem in July, leading to Tory claims she put "spin before public safety".
The BBC's Nick Robinson says in the "worst-case scenario" more than 8,000 people may have been working illegally.
Countering criticism from the Conservatives, Ms Smith said she had been interested in action rather than words over the situation.
"There was no fiasco, there was no blunder, there was strengthened and improved action," she told MPs.
The response from the Home Office so far has been blunder, panic and cover-up
Has Smith seen off critics?
The "spin" accusations came after a leaked email from her private secretary in July stated that "she did not think that the lines to take that we currently have are good enough for press office or ministers to use to explain the situation".
Ms Smith told MPs that it was true she did not think the "lines to take" were sufficient - but that was because the analysis of the issue was not complete.
She said her priority had been to establish the "full nature and scale" of the problem and to take action to deal with it, "rather than immediately to put incomplete and potentially misleading information into the public domain".
And she stressed the Security Industry Authority (SIA) had the "discretion" to check an applicant's right to work in the UK - but the "legal duty" rested with the employer.
In April 2007 an enforcement operation had discovered 44 people working at a security company who did not have the right to work in the UK - 12 had been subcontracted to a company that provided staff to guard locations under Metropolitan Police contracts.
I did not tell the prime minister because there was not a fiasco, there was action being taken to strengthen the system
Home Secretary Jacqui Smith
At-a-glance: Tuesday at Westminster
Others were employed at ports and airports. One man had been guarding government cars - including that of the prime minister.
Former Conservative leader Michael Howard asked Ms Smith if she had told Mr Brown when the "fiasco" first came to light.
Ms Smith replied: "I did not tell the prime minister because there was not a fiasco. There was action being taken to strengthen the system."
More intensive checks on security applicants began in July, and since then 740 licences have been refused out of 32,500.
But Ms Smith said it remained unclear how many licences had been granted before July to illegal workers.
Around 6,000 cases had been checked so far.
BBC political editor Nick Robinson said those figures could mean that, by the time officials finish checks on 40,000 people in December, more than 8,000 illegal workers may be found.
Illegal immigrants worked for the Met Police and at airports and ports
Conservative leader David Cameron told the BBC that leaked emails reported in the Daily Mail appeared to show no announcement was made in July "because this was going to look bad for the government".
A subsequent Home Office report on 20 August admitted that neither the department nor SIA knew the extent of the problem.
It added that the Home Office press office continued to "recommend strongly" that no public statement be made, and that any announcement "would not be presented by the media as a positive story".
The prime minister's spokesman said on Tuesday that Ms Smith had Gordon Brown's full confidence and that he had spoken to her that morning and been "satisfied with the explanation". But he refused to say when Mr Brown had been informed about the problem.
Shadow home secretary David Davis said the prime minister had promised a "different type of politics, a more open and honest dialogue".
"Why wasn't the home secretary frank and candid about the 5,000 illegal workers licensed to work in sensitive security posts in this country?"
He added: "The response from the Home Office so far has been blunder, panic and cover-up."
Liberal Democrat home affairs spokesman Nick Clegg said: "The new home secretary seems to have learnt nothing from the failures of her predecessors.
"When the Home Office makes a mistake like this it must come clean immediately, own up and start the process of sorting out the mess. It is completely unacceptable that their first instinct was to start a cover-up."