THE Passport Office is to be made directly accountable to ministers after a summer of chaos that saw outstanding applications soar past half a million.

Home Secretary Theresa May announced the move after two reviews, as well as demands from the influential Home Affairs Select Committee to strip the Passport Office of agency status.

HM Passport Office (HMPO) will cease to be an executive agency from October 1 and current chief executive Paul Pugh has effectively been sacked, staying on until a successor - a director general - is appointed.

Mrs May said: "As the events of the summer showed, it is essential that HMPO is run as efficiently as possible and is as accountable as possible. I also know that its hard-working staff are committed to delivering a high-quality service to the public. I believe these changes will put them in a stronger position to do so."

HMPO was accused of putting holidaymakers' summer plans in jeopardy as a backlog of applications spiralled to 550,000.

Ministers said there are now just 80,000 outstanding applications.

After the level of delays emerged, applicants booked to travel within seven days, whose applications had been with the Passport Office for longer than three weeks, were offered a free upgrade to the fast-track service.

The select committee has called for all applicants who paid for the fast-track upgrade, before the contingency measures were introduced, to be compensated. A normal passport application costs £72.50, while the fast-track service costs £103.

The Passport Office was established as an executive agency of the Home Office in May last year.

A similar move was made for the former UK Border Agency, but that was also scrapped and it was brought back into the Home Office under control of ministers.

Select committee chair Keith Vaz said: "The passport crisis … was handled appallingly by senior management.

"I hope that the new director general will provide the HMPO with the fresh start that it needs."

David Hanson, shadow minister for immigration, said: "This back-of-the-envelope re-organisation is too little, too late for the thousands of families who suffered this summer in a passport crisis caused by the complacency and incompetence of Theresa May and David Cameron.

"Belatedly bringing the agency back into the Home Office raises the question about their ability to manage this crisis even now.

"Ministers decided to close overseas offices and sack staff, ministers refused to listen to warnings from the public and from unions, ministers buried their head in the sand until Labour forced them to deal with this issue. Bringing the Passport Office back to the Home Office won't solve the problem that this Government continues to get it wrong at every turn."