Home Secretary Theresa May has announced measures to help clear the backlog in passport applications - and scrapped charges for urgent renewals.
People renewing their UK passports from overseas will be given a 12 month extension to their existing passport.
Those applying for passports overseas on behalf of their children will be given emergency travel documents.
Labour said Mrs May had lost her grip and called for an apology.
Mrs May was being grilled on the situation by Labour's Yvette Cooper in the Commons - two days after denying claims of a crisis.
She said the government would do "everything it can" while maintaining security to "make sure people get their passports in time" - but there was no "big bang, single solution".
People with an "urgent need to travel" will be fast-tracked through the system free of charge, she told MPs. They are currently charged up to £128.
It will only apply to people who are renewing their passport by post from within the UK - and are booked to travel within the next seven days but whose application has been with the Passport Office longer than the standard processing time of three weeks through no fault of their own.
She also confirmed that responsibility for dealing with applications for passports overseas was changed from consulates and embassies to an online system based in the UK in March.
This change had been made to provide better value for money and to ensure more "consistency" of service and security checks, she said.
Labour MP Geoffrey Robinson called the timing of this change - at the pre-summer peak applications season - "idiotic".
But Mrs May and other Home Office ministers have blamed the problems on a surge in applications which they say are running at a 12 year high.
Mrs May stressed that security would not be compromised by the changes, telling MPs that parents issued with emergency travel documents for their children would still have to "provide comprehensive proof that they are the parents before we will issue these documents".
In the longer term, the passport office could be stripped of its agency status and brought directly under Home Office control "in line with other parts of the immigration system", she told MPs.
She has also ordered a review by her department's top civil servant, Mark Sedwell, into how the agency could be run more efficiently, saying it was not just a question of "throwing more staff at the problem".
The Public and Commercial Services union said it would support the move of the Passport Office into the Home Office, saying staff were currently paid less than equivalent Home Office staff.
General Secretary Mark Serwotka said ministers were "going to extraordinary lengths to try to deny the reality that crude political decisions to cut staff have caused this crisis".
For Labour, shadow home secretary Yvette Cooper noted a "huge turnaround" from a few days ago when Mrs May was insisting there was no backlog.
She said every MP had been "inundated" with complaints about the issue but Mrs May did not seem to have known what was going on. "This is a sorry shambles from a sorry department," she told MPs.
"Government incompetence means people are at risk of missing their holidays, their honeymoons, their business trips."
Ahead of the Commons exchanges it emerged that Passport Office staff had planned to relax security checks on applications from overseas. Leaked documents suggest they wanted to ease rules on the supporting evidence that UK nationals living abroad have to provide, where it did not compromise security.
The Home Office reacted to the leak by saying it had been "unaware" of the proposed change and ordered the guidelines to be withdrawn.
The Passport Office is dealing with about 465,000 renewals and first-time passport requests, and 150,000 passports are being sent out each week.
The Guardian said a briefing note issued by the agency on Monday had proposed a number of measures to "enable overseas applications to be processed more quickly without compromising the quality and security of either the process or the passport".
The note said the new protocols, which were supposed to come into force at offices in Liverpool and Durham on Wednesday and in Belfast next week, were "focused on achieving the right balance between customer service, public protection and organisational requirements".
But a Home Office spokesperson said: "Ministers were unaware of this document and have instructed Her Majesty's Passport Office to withdraw it immediately."
There has also been an inquiry into the leak of the photo, above, of passport applications piled up in the Passport Office and all staff have been told not to use mobile phones while working.
On Wednesday Prime Minister David Cameron said up to 30,000 passport applications had been hit by delays.
Passport Office chief executive Paul Pugh - who will be questioned next week by MPs on the Commons Home Affairs Select Committee - said there had been "exceptional" summer demand but that extra staff had been brought in to handle applications.
Applying for a passport
Guidance on the Passport Office's website says it should take three weeks for passports to be renewed, although the process can take longer if more information is required or the form is not filled out correctly.
It states that people should not book holidays or make other travel plans until they have a valid passport, adding that those doing so do it "at their own risk".
Standard adult passports cost £72.50 to renew or £81.25 if you use the Post Office's Passport Check and Send service. Child passports cost £46 or £54.75 respectively.
Those needing a passport urgently can pay extra for a premium or fast-track service. A premium service, costing £128, means passports can be collected within four hours of being approved.
Under the fast-track service, costing £103, a passport is returned within a week of the application being approved.
For over-16s applying for their first adult passport, the Passport Service says people should allow for at least six weeks to receive it.
He said almost three million passports had been issued for UK customers in 2014, including over one million issued in the eight weeks since the start of April.
The Public and Commercial Services Union has said it does not know how many applications have been delayed.
It has claimed the loss of a tenth of the agency's workforce in the past five years and the closure of local passport offices have contributed to "major problems".