A shake-up is underway in Australia's Immigration Department following a scathing report that found serious and deep-seated problems within its administration. Prime Minister John Howard has been forced to apologize to two women who were wrongly detained - and one of whom was deported - as illegal immigrants.

It was the wrongful detention of a mentally-ill, German-born woman that sparked this wide-ranging investigation into Australia's immigration system. Cornelia Rau, who is a permanent resident of Australia, was held in custody for 10 months until early this year. Officials thought she was an illegal immigrant.

In another serious blunder by immigration officers, a disabled woman who is an Australian citizen was wrongly deported to the Philippines in 2001.

Vivian Alvarez Solon was found earlier this year living in a hospice near Manila.

Australia's Prime Minister John Howard issued an apology to the two women on Thursday. "Both Cornelia Rau and Miss Alvarez are owed apologies for their treatment, and on behalf of the government I give those apologies," he said. "There were failures, there are changes needed, they've been recommended."

In his report, former federal police chief Mick Palmer said there were "systemic weaknesses" in the Immigration Department. He said these had contributed to the failure of the authorities to establish Miss Rau's identity and the length of her incarceration.

The government has accepted the findings of the Palmer report, and major bureaucratic changes have been announced at the highest levels of the department. Senior executives have been replaced, and there will be an independent review of this re-organization.

Opposition politicians had been demanding the resignation of Australia's immigration minister, Amanda Vanstone. She has expressed regret over these mistakes by her officers, but is staying put.

Prime Minister Howard said he had full confidence in Ms. Vanstone's abilities.

Australia has softened its controversial immigration policies in recent months, agreeing to release the children of illegal immigrants from its detention centers.

Canberra's policy of mandatory detention of asylum seekers who enter the country illegally has been widely criticized by human rights groups in Australia and overseas.