Home Secretary Theresa May has apologised for delays in processing passport applications and insisted the Government is doing all it can to deal with the situation.
She told the Commons: "Her Majesty's passport office is dealing with the highest demand for passports for 12 years while the surge in demand usually experienced during the summer months started much earlier in the year.
"As a result, a number of people are waiting too long for their passport applications to be processed.
"I would like to say to anybody who is unable to travel because of a delay in processing their passport application that I am sorry and the Government is sorry for the inconvenience they have suffered and we are doing all we can to put things right."
But Mrs May insisted : "Despite the unprecedented level of demand, the overwhelming majority of people making straightforward applications are still receiving their passports within three weeks as usual.
"Over the first five months of this year, HMPO has processed more than 97% of straightforward passport renewals and child applications within the three-week target turnaround time.
"In the first two weeks of June, up to June 15, 89% of straightforward renewals and child applications were still being processed within the three-week turnaround time. So the majority of people ... have been receiving their passports within three weeks.
"Over the first five months of this year, over 99% of straightforward applications have been processed within four weeks."
The Home Secretary was speaking in an opposition day debate called by Labour, which saw many MPs jumping up from their seats to raise the plight of their constituents.
Immediately before her speech, shadow home secretary Yvette Cooper urged Mrs May to begin it with an apology.
Ms Cooper said: "We still don't know when things will be back to normal, families still don't know how long they can expect to wait and we still don't know whether the Home Office has a grip.
"Would it be too much to ask for a little bit of humility from the Home Secretary when she stands up, given the holidays she has put at risk?
"Yesterday the passport office chief executive gave an apology, last week the Prime Minister gave an apology.
"So can we have an apology from the Home Secretary as the minister in charge of it all? Why doesn't she begin her speech with that apology to those families?"
Mrs May faced accusations that she had blamed passport delays on everything from the weather to Education Secretary Michael Gove and his "hissy fits", as Labour upped the pressure for compensation to applicants who had paid for urgent upgrades.
Labour frontbencher Ms Cooper compared the Government's approach to Monty Python, known for comedy which was often surreal and chaotic, as she attempted to find out when the backlog would be cleared and if measures announced to clear it were working.
Ms Cooper also told Mrs May the helpline system was "doing people's heads in" and questioned why it had 650 extra staff, claiming they just took messages that no one called back to address.
MPs from Labour and the Scottish National Party told of constituents facing problems, including a family opting to give their baby Canadian citizenship rather than British citizenship due to the delays, individuals who work abroad but cannot travel back to Britain, and families concerned they will not be able to go on holidays they have paid for.
After she told of one family who went round in circles on the helpline trying to secure an upgrade for their application, Ms Cooper said: "It's not even Kafkaesque, it's Monty Python.
"We don't need a system which simply has more staff to take messages. We need the staff in place to clear the passports and make sure that constituents across the country are told what is going on."
Ms Cooper told the Commons the Home Office "simply didn't listen to the warnings" and pointed to Passport Office concerns in January, application increases continuing in February and concerns raised by shadow immigration minister David Hanson in March.
She told Mrs May: "Why didn't you act then? You sit on the front bench and say you did act - then how come so many people are still waiting so long for their passports having paid so much extra to get them just in time?"
Ms Cooper reeled off further warnings from MPs in April and diplomats in May, adding: " And why even in June did you spend days denying there was a backlog, denying there was a problem, boasting about meeting all the targets - the Prime Minister claimed last week the Home Office has been 'on it' since January.
"Well on what? They certainly weren't 'on it' even last week.
"You didn't have your eye on the ball. You were too busy dealing with the Education Secretary's hissy fits. Too busy blaming everyone else."
Ms Cooper went on: "It's always someone else's fault with this Home Secretary: blame the weather, blame the holidaymakers, blame the economy, blame the Labour Party, blame the civil service, even blame the Education Secretary - we'll join you in that one - round in circles they go.
"We've known for some time this Government isn't going anywhere. Now no one else is too.
"When will this crisis be over?"
Mrs May would not commit to refunds for people who had paid an extra £73 for the premium service for passport renewals after repeated questions from MPs.
The Home Secretary said those who have not received their passports three weeks after the application for renewal and need to travel in seven days will receive their travel documents free of charge.
She was asked by veteran Labour MP Geoffrey Robinson (Coventry North West) : "You are evading the simple question. There are many people who have incurred extra cost because of the incompetence and bungling of this organisation which was quite clear at the select committee exists sadly within HMPO and are writing to MPs saying will you please press the case on the Government.
"They have incurred particularly the £73 extra cost, no fault of their own. Any private sector company would have to make allowances for that, would reimburse and we're looking to the Government to do that.
"We just want an answer now or later - it won't go away."
Mrs May replied: "You characterised the Passport Office in a particular way in your question and I think that was an unfortunate way to characterise the staff because the staff are working extremely hard.
"I think the staff in the Passport Office that I have met and spoken to, that Immigration Minister James Brokenshire has met and spoken to, are working very hard to try to make sure.
"We have set in place arrangements for people, as I indicated this House last week, who find themselves, and it has been operating over last weekend, unable to travel within seven days. Those are the free of charge arrangements that we have put in place, it's not a refund. Somebody is now able to upgrade free of charge in those timescales."
Home Affairs Select Committee chairman Keith Vaz said the Passport Office had gone from "being a swan to an ugly duckling in just 12 months".
He said: "There is no denying after we took evidence from the chief executive of the passport agency, that there is a crisis.
"I welcome what the Home Secretary has done over the last seven days, I think these are very important measures which I hope will alleviate the real suffering and distress many of our constituents have suffered over the last few months.
"I had wished those measures had been put in place much earlier."
Mr Vaz said he had contacted the Home Secretary on her personal number to get progress on a constituency case - but insisted this should not be how Government works.
Labour veteran Sir Gerald Kaufman (Manchester Gorton) laid the blame at Mrs May's door and attacked her as "useless" after she "scuttled out" of the debate.
He said: "She is the worst Home Secretary of my 44 years in the House of Commons... there she goes, useless and arrogant."
Sir Gerald outlined complaints from his constituents, before adding: "What we are having here is a situation which is a scandal. It isn't a scandal caused by a lack of concern lower down, they do what they are told - it is caused by a lack of concern and interest at the very top.
"It was very typical of this Home Secretary that she scoots out of here after listening to two back bench (speeches), not to do a job - which she is incapable of doing anyhow.
"I have been in this House for 44 years and there have been 18 home secretaries during my period in the House of Commons. They varied in quality but all, every single one of them, have been accessible... I do not know what elevated ideas this Home Secretary has about her quality and personality.
"I cannot understand why she thinks she is too good for the rest of us but that is what is taking place."
Mrs May said that contingency arrangements had been put in place since January when an increase in demand was anticipated.
She said: "Ever since this increase in applications became apparent back in January, HMPO has been putting in place measures to meet the demand.
"250 additional staff have been transferred from back office roles to frontline operations, 650 additional staff have been provided to work on HMPO's customer helpline, HMPO has been operating seven days a week since March, couriers are delivering passports within 24 hours of them being produced, and on Monday new office space was opened in Liverpool to provide the Passport Office with additional capacity.
"However as I said to the House last week, even with these additional resources, HMPO is still not able to process every application it receives within the three week waiting time for straightforward cases."
Mrs May added: "Contingency arrangements have not just been introduced. Contingency arrangements have been being introduced since January of this year when it became clear that there was an increase above forecast in the demand for applications.
"As the demand has increased, and as the increase has been greater than that which was initially experienced, of course the Passport Office takes greater measures, that's exactly what is right and proper."
The Home Secretary agreed that people calling up the Passport Office anxious they would not get their documents in time to travel despite being within the time limit could be making the problem worse as people try to get their passports returned earlier than normal.
She was asked by Tory Richard Fuller (Bedford): "I have also been contacted by constituents within the time for the normal type of passport applications.
"Are you concerned that the anxieties are unnecessarily being raised for people who are therefore making the problem worse because they are chasing for their passports to be returned in a shorter period than is the normal period.
"What could you say would be your advice to people in those circumstances?"
Mrs May replied: "You are right. Certainly when I was at the Passport Office in Peterborough they pointed out to me that a number of people had been getting in touch because of the publicity about what was happening at the Passport Office, people who would be getting their passports within the time-frame that is set out but whose anxieties had been raised because of what they had heard being said about what was happening in the Passport Office.
"That is why I did indicate that I think it is important that we are clear that while some people have not been getting their passports within the time-frame that is normal, while some people have been having difficulties in relation to their travel, and we have been taking steps in relation to that as I announced last week, while that has been happening the vast majority of people are still receiving their passports within that three week time."
Labour's George Mudie (Leeds East) called on the Government to review individual cases.
He said: "They knew for five months they were running into trouble. Did they alert anyone to the fact they were running into trouble, the answer is no. The answer is they did not change the website and so people put in and were putting themselves in danger and their holidays in danger because the Government didn't come clean."
Tory Stephen McPartland (Stevenage) spoke about his experience of working for the Passport Office as a student in 1998 and the "huge problems" experienced during that period.
He said: "What's been happening over the past few months is difficult for those individuals who are involved, however it was nothing at all like it was. I worked there, I experienced it and I can assure every member in this House that the word chaos does not do it justice."
Labour's Paul Flynn (Newport West) lamented the closure of Newport passport office in 2011.
He said: "I believe this foul-up will become one of the signature foul-ups in this Government and they will be rejected by the public not for some issues involving Europe or other great issues, they will be rejected because they are guilty of creating an ineptocracy, that virtually nothing they've done has worked."
Labour's Katy Clark (North Ayrshire and Arran) called the "crisis" both "predictable but also predicted" and accused the Home Secretary of not only failing to deal with the situation but of helping to create it by closing passport offices around the country.
She told the House: "This issue isn't just about how the Home Secretary is dealing with this problem or how she has dealt with it over the last few weeks or indeed the last few months, this is about how she has helped create the situation that we are currently dealing with.
"The last Labour government went to a great deal of trouble to open up passport offices throughout the country. The Conservative Government when they got elected had a policy of closing passport offices throughout the country.
"They closed 22 passport offices, one processing centre and indeed there has been outsourcing of work.
"The passport office made profits of £70 million in the last financial year so this really isn't a sector of government which should be affected by the austerity cuts.
"The Government has treated it like the other departments it is dealing with and insisting there should be cuts in staffing but this is an area where people pay for a service.
"Frankly, it is the obligation on government to make sure that people get an efficient service that they have paid for."
Earlier, Labour's Jessica Morden (Newport East) told the House that "almost immediately" after 150 jobs were lost at the Newport office in 2010, overtime was being offered.
She said: "I don't understand why the current delays have come as a surprise to the Home Office. The signs have been there for years but they have insisted on pursuing the cuts with too little regard for the effect it has had on customer services and to staff.
"The Government, as they try and solve this problem, should look to put those 150 jobs we lost in Newport back in. We have got the space, we have got the experience. It is important for customers to get the service that is advertised to them."
Shadow immigration minister David Hanson said the apology was not enough and called for clarity about why the delays had taken place.
He said: "I welcome the Home Secretary's apology but an apology is not enough.
"We need to have a clear exposition, a clear outline of why this problem has been caused.
"Because there are a range of debates and discussions being put forward today and there is no clarity on that."
The Labour motion, which called on the Government to expand its emergency measures by offering compensation to applicants who had paid for urgent upgrades, was defeated 282 to 235, majority 47.