The Church of England is facing a Commons investigation into the system that allowed the Liverpool bomber to stay in the UK despite several asylum rejections.
Emad al-Swealmeen, 32, arrived in the UK from the Middle East in 2014 and had an application for asylum rejected, but was still in the country.
Priti Patel, the Home Secretary, is understood to be appalled at the "merry-go-round" of failed asylum seekers changing religion and using other tactics to launch "appeal after appeal" to stay in the country.
The Iraqi man killed in the abortive suicide bomb attack outside Liverpool Women’s Hospital is understood to have been helped by the Church in his attempts to avoid being kicked out of Britain, after his claim for asylum was first rejected in 2014.
The Home Office believes changing religion is now "standard practice" among asylum seekers from countries including Iraq "to game the asylum system", as converts claim they are at risk of persecution in their home countries.
The Telegraph has established that after his initial application was rejected in 2014, Emad al-Swealmeen, 32, converted to Christianity on a five-week course in a bid to persuade officials to let him stay in the UK.
Now, Tim Loughton MP, a senior Conservative who sits on the Home Affairs Select Committee, has vowed to launch a Commons investigation.
He told The Sun: "There is a worrying new development where it appears certain asylum seekers are playing the religious card to avoid deportation to certain countries.
"This is gaming the system and something we must look into.
"There are very serious questions to be asked about how this from a safe country and why he was still at liberty seven years on and free to commit this atrocity."
Britain’s ‘dysfunctional’ asylum system
The suspect in the Liverpool Remembrance Sunday suicide bombing was able to exploit Britain’s "dysfunctional" asylum system to remain in the country, Home Secretary Priti Patel has said.
Ms Patel, on a three-day visit to Washington, said the system was a "complete merry-go-round" with a "whole industry" devoted to defending the rights of individuals intent on causing harm.
Swealmeen died in the blast in a taxi outside Liverpool Women’s Hospital shortly before 11am on Remembrance Sunday.
The incident has been declared a terrorist attack and the UK terror threat level has since been raised from substantial to severe, meaning an attack is "highly likely" rather than "likely".
Ms Patel told reporters on her flight to the US capital that the case showed why the Government was right to reform the asylum system.
"The case in Liverpool was a complete reflection of how dysfunctional, how broken, the system has been in the past, and why I want to bring changes forward," she was quoted as saying.
"It’s a complete merry-go-round and it has been exploited. A whole sort of professional legal services industry has based itself on rights of appeal, going to the courts day-in day-out at the expense of the taxpayers through legal aid. That is effectively what we need to change."
She added: "These people have come to our country and abused British values, abused the values of the fabric of our country and our society.
"And as a result of that, there’s a whole industry that thinks it’s right to defend these individuals that cause the most appalling crimes against British citizens, devastating their lives, blighting communities – and that is completely wrong."
Swealmeen was a Christian convert and there was growing concern within the Home Office at the role on the Church of England in converting asylum seekers.
Couple who took in terrorist say he was ‘genuine’ Christian
However a couple who took him in after his appeal against the asylum ruling was rejected insisted that he had been an "absolutely genuine" Christian with a "real passion for Jesus Christ".
Malcolm and Elizabeth Hitchcott said they had been contacted by Al Swealmeen in 2017 when he was "desperate" for somewhere to stay.
Mr Hitchcott told BBC Radio Merseyside: "He arrived here on April 1, 2017. He was with us then for eight months, and during that time we saw him really blossoming in regards to his Christian faith.
"He really had a passion about Jesus that I wish many Christians had, and he was ready to learn.
"He was keen on reading his Bible and every night we used to pray – my wife and him, and if there was anybody else in the house – we prayed for half an hour or so and studied the scriptures.
"He was absolutely genuine, as far as I could tell. I was in no doubt by the time that he left us at the end of that eight months that he was a Christian."
An Islamist plot is one line of inquiry being considered by police, although investigators are keeping an open mind and the motivation is yet to be established.
Security services are also trying to determine whether or not the hospital or a nearby Remembrance Sunday service at the cathedral in which Swealmeen was confirmed.
Assistant Chief Constable Russ Jackson, from Counter-Terrorism Police North West, previously told journalists the explosive device had been "manufactured" and the force’s assumption was that it was built by Al Swealmeen.
The inquiry is examining, among other possibilities, whether the main charge on the device failed to explode and if the homemade explosive TATP was used.
Searches have been carried out at an address in Rutland Avenue, where detectives said Al Swealmeen was picked up by the taxi, and at a second property in Sutcliffe Street, where officers believe he previously lived.
Four men arrested under terrorism laws in the Kensington area of Liverpool – three aged 21, 26 and 29, who were held on Sunday, and a man aged 20 who was detained on Monday – have now been released from police custody following interviews.
Police continued to appeal for any information about the incident or the suspected attacker.