A report by an independent watchdog reveals that the centre, designed to house people who had tried to enter the UK illegally, is now mainly being used for 'sentence expired' prisoners.
It costs £25,000 a year to keep a detainee. They cannot be released because they are not allowed to stay in the country but they can't be deported because of delays in ascertaining where they should be returned to.
Facilities at Lindholme Immigration Removal Centre, which is next to HMP Lindholme in South Yorkshire, include an activities centre, fitness suite and library.
Each detainee has their own room and key and their own television.
Until recently, around 90 per cent of the 124 detainees were foreign offenders who had committed crimes on these shores - but recent work has seen it cut to 60 per cent.
Concerns about the situation have been raised in two reports by the Independent Monitoring Board for the prison, which also oversees the removal centre.
Chairman Ben Bradley said the board felt criminals should be dealt with by immigration officials while in prison so they were immediately deported.
He added: 'We are extremely concerned at the amount of foreign national prisoners in the immigration centre. In total, 24 have been in there for more than six months.
'It could save the taxpayer money if there was some work done.'
In the report on the prison, the board says: 'One of our major concerns is the length of time it takes to process the legal documnetation designed to remove foreign national prisoners from our shores.
Tory MP Philip Davies said the situation was a 'shambles'. The MP for Shipley, West Yorkshire, said: 'I think this is an absolute disgrace and I would echo the concerns raised by Lindholme's Independent Monitoring Board.
'If they do serve their sentences in this country, there is absolutely no excuse for them to be lounging around in an immigration centre at the taxpayer's expense - they should be deported.
Alan Kittle, director of detention services for the UK Border Agency, said: 'We welcome the report's findings that there has been a significant reduction in the foreign national prisoner population at the centre.
The UK Border Agency has continued to improve its processes for deporting foreign nationals who have committed serious crimes. However, where a detainee refuses to co-operate with the removal or deportation process, detention may be unavoidably prolonged.'