GENEVA, Oct 3 (Reuters) - The growth of private security businesses in many countries means detention is often now being promoted as a means to deal with asylum-seekers, the United Nations refugee agency said on Wednesday.

The privatisation of prison services and detention centres, is a particularly worrying trend, said Erika Feller, the agency's assistant high commissioner for protection.

"By creating an economic lobby in favour of detention, this has undermined serious efforts to create alternatives to detention and has contributed even further to blurring the distinction between the refugee and non-refugee detainees," she said.

Alternatives like government-run housing were less likely to be chosen if there was significant pressure to utilise privately-run detention centres.

Another disturbing trend undermining the rights of refugees was the way security concerns are driving the operation of asylum systems, she told the executive committee of the Office of the U.N. High Commissioner for Refugees (UNHCR).

Feller said asylum is a lottery in some regions, with states applying refugee convention standards inconsistently.

"The widely divergent refugee recognition rate among states is a telling indicator, with research showing, for example, that persons from Iraq, Sri Lanka or Somalia have very different prospects of finding protection depending on where their claim is lodged," she said.

Security concerns and arbitrary detention left asylum seekers in legal limbo in many countries, she said.

Refugees arriving by sea face particular problems with many countries refusing to allow them to disembark, and ships refusing to rescue refugees in peril at sea, she said.

Some asylum-seekers were unwelcome even if their refugee status or need for protection was unquestioned.

These "untouchables" include politically sensitive ethnic groups, elderly people who could become a public charge, large families who may be costly to support, single men seen as a public threat to public order or refugees with low educational levels who may take longer to integrate, she said.

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