Pressure to cut border queues during the London 2012 Olympics led to customs officers overlooking checks on drugs and gun smuggling, the public spending watchdog has warned.
A new report by the National Audit Office (NAO) said staff shortages and the need to juggle passport checks with keeping queues down led to shortcuts in key duties such as checking for illegal goods.
Nearly 100% of passengers at the border received full passport checks in 2012-13, the NAO said, while more than 99% of European arrivals cleared controls within the 25 minute target time.
But this success came at the expense of dealing with forgery detections, and seizures of cigarettes and counterfeit goods - which all came in below targets.
Yvette Cooper described the report as "shocking" Margaret Hodge MP, chair of the Committee of Public Accounts, said: "The Border Force did well to reduce queuing times both during and after the Olympics, but it is deeply worrying that this came at the expense of its other responsibilities, particularly customs.
"The Border Force must be able to check both goods and passengers at the same time - border security cannot be an either or choice."
Shadow home secretary Yvette Cooper said: "This report is shocking and shows the chaotic and cavalier approach David Cameron and Theresa May have taken to border security and illegal immigration.
"The NAO found drops in checks for illegal migrants and criminal activity because of the Home Secretary's irresponsible decision to cut 500 Border Force staff prior to the Olympics."
Staff shortages mean key checks are not being carried out by officials Immigration Minister Mark Harper said the Home Office had inherited an organisation with "significant challenges".
"We have recruited more Border Force staff, established command centres to deploy those staff more flexibly and effectively and are reforming working practices," he said.
A fifth of Border Force's 7,600 employees are employed under terms that restrict working hours to fixed periods during the week, stopping it from deploying its workforce flexibly.
At Heathrow in spring 2013, less than half the workforce was contractually obliged to work before 5am without being paid extra, despite a significant number of long-distance flights arriving at that time, the NAO said.
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