Illegal immigrants will be denied driving licences under laws to be announced on Thursday.

Banks will also be told to refuse to open accounts for foreigners who are not entitled to be in Britain.

The Coalition’s Immigration Bill will also require some foreign nationals to pay a £200 surcharge to use the NHS.

The legislation is the Government’s response to the rise of the UK Independence Party and growing public unease about immigration.

The Bill will give the Driver and Vehicle Licensing Agency powers to check the immigration status of people applying for a licence. In addition, immigrants who are found to have overstayed in Britain will have their licences revoked.

Bank staff will be legally required to check applicants’ details against databases held by anti-fraud organisations. The Home Office said that such databases hold government data on “tens of thousands of illegal migrants”.

Despite doubts about its viability, the Bill will also contain a legal requirement for private landlords to check the immigration status of tenants.

Ministers said the changes will make life harder for illegal immigrants in Britain, reducing the “pull factors” that encourage people to remain without permission.

Mark Harper, the immigration minister, said the Coalition was striking a balance between legitimate immigrants who benefit the economy and illegal immigration.

“We will continue to welcome the brightest and best migrants who want to contribute to our economy and society and play by the rules,” he said. “But the law must be on the side of people who respect it, not those who break it.”