Lone children who claim asylum in Britain will be shared around the country under plans to ease the strain on councils caring for large numbers.
Immigration Minister James Brokenshire stressed the intention is for a new "dispersal" system for unaccompanied asylum-seeking minors to be voluntary.
However, powers in proposed new legislation will mean town halls could be compelled to take part as a last resort.
Children as young as six have arrived in the country without a parent or guardian amid the international migration crisis.
Last year there was a total of 3,043 asylum applications from unaccompanied under-18s, an increase of 56% from 1,945 in 2014. Overall, there are currently more than 4,000 in the UK.
Councils have a legal duty to care for youths who arrive in their area from abroad seeking international protection - placing pressure on authorities which contain key gateways for arriving migrants.
Kent County Council currently has more than 800 unaccompanied asylum-seeking children- compared to approximately 350 at the same time last year.
Councils are responsible for costs including schooling, foster care, university fees and housing, and receive funding at a fixed rate from central government.
Last year improved funding terms were offered to local councils willing to accept children from Kent.
Mr Brokenshire confirmed discussions are ongoing about the creation of a broader dispersal scheme.
"My intent is that that should be a voluntary arrangement and effectively the statutory mechanisms that we have provide underpinning to that if those arrangements don't operate in the way that we... anticipate," he told the Lords EU Home Affairs Sub-Committee.
Councils will be informed about proposed funding rates within weeks, with the scheme expected to be rolled out later this year.
Minister for Children and Families Edward Timpson told the hearing it is a "national issue".
He said: "It will mean that in some parts of the country where they have very limited involvement and experience of dealing with unaccompanied asylum-seeking children need to set up a mechanism which ensures that they can garner that knowledge and experience as quickly as possible.
"This is a national issue but at the moment it's been the preserve of some local authorities."