The Home Office could use disused cruise ships to house asylum seekers while their claims are being processed.
Home Secretary Suella Braverman confirmed her department is looking at the idea as an alternative to resorting to costly hotels and suggested officials were in talks with ship companies.
Disused holiday parks and former student halls are also being "looked at" under new plans by the Home Office, she added, saying that hotels were costing the British taxpayer over £5 million a day.
Speaking to the Lords Justice and Home Affairs Committee on Wednesday, she told peers “everything is still on the table and nothing is excluded”.
Ms Braverman told of the “incredibly difficult” challenge of hitting the ambition of getting 100,000 asylum seekers in local authority accommodation – rather than hotels – with that figure currently at 57,000.
“You then asked about cruise ships - we want to end the use of hotels as quickly as possible because it’s an unacceptable cost to the taxpayer, it’s over £5 million a day on hotel use alone,” she told peers.
“We will bring forward a range of alternative sites, they will include disused holiday parks, former student halls – I should say we are looking at those sites – I wouldn’t say anything is confirmed yet.
“But we need to bring forward thousands of places, and when you talk about vessels all I can say is – because we are in discussion with a wide variety of providers – that everything is still on the table and nothing is excluded.”
During the Committee, Ms Braverman also said she has yet to find a new airline to deport migrants to Rwanda.
The home secretary vowed she was "committed" to sending people to Rwanda "as soon as possible" after High Court judges ruled the government’s multi-million pound plan to give migrants who cross the Channel to the UK a one-way ticket to the east African nation was lawful.
Asylum seeker Ali told ITV News that although crossing the Channel was unimaginably scary, he believes the Rwanda policy will do little to dissuade people from trying
She told MPs the High Court judgment “thoroughly vindicated” the government’s policy – which she insisted is “compassionate”, “pragmatic” and “rational”.
But she suggested she did not yet have an airline committed to the deportations and told peers there were “ongoing discussions with several airlines” after Privilege Style pulled out in October amid pressure from campaigners.
The government used a plane run by the Spanish charter airline for first flight - due to take off on June 14 - which was abandoned at the last minute due to legal challenges.
“We are returning people almost every week to various countries around the world. We do that through scheduled flights, we charter flights… so we’re in a variety of discussions with several airlines for lots of different destinations," Ms Braverman told peers.
The “delivery” of the Rwanda deal was “on pause, it’s on hold while we’re going through litigation”, she added.
Downing Street admitted it was impossible to say when flights could take off while the threat of further legal action remained.
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