New York Governor Andrew Cuomo said on Friday that the state will file a lawsuit challenging the United States Department of Homeland Security's decision to block New Yorkers from participating in "trusted traveller programmes" in retribution for a new state law that could hinder federal immigration enforcement.

"It's an abuse of power. It's extortion. It is hurting New Yorkers to advance their political agenda. And we're going to fight back," said Cuomo, a Democrat.

The lawsuit is the latest salvo in an escalating fight over immigration policy between Republican President Donald Trump and Democratic leaders in his home state.

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In December, a new state law took effect allowing New York residents to apply for driver's licences without having to prove they are in the US with documents. Part of that law also prohibited the state's Department of Motor Vehicles from giving records to federal immigration agents.

On Thursday, the US Department of Homeland Security (DHS) retaliated, saying it would no longer allow New Yorkers to enroll, or renew their membership in, certain federal programmes that make it easier for people travelling internationally to get through border security, including the Global Entry programme.

In announcing the change, acting DHS Secretary Ken Cuccinelli said New York had endangered public safety by barring federal agents from quickly accessing vehicle and criminal records to check for fugitive warrants or confirm someone's identification.

Ken Cuccinelli, acting director of US Citizenship and Immigration Services, speaking to the news media at the White House in Washington, DC [Leah Millis/Reuters]

The move is expected to affect at least 175,000 New Yorkers now enrolled in the programmes, who will be kicked out as their permits expire, plus around 30,000 commercial truck drivers enrolled in a programme that eases their crossings into the US from neighbouring Canada.

Several other states have similar policies of allowing unauthorised immigrants to get driver's licences, but New York is the only state that bans the sharing of motor vehicle records with immigration agents, DHS officials said.

Trump has been singling out New York in recent months for especially harsh criticism over so-called "sanctuary" policies for immigrants.

The president assailed New York City officials in his State of the Union address over the city's policy of not turning over some criminal defendants wanted for immigration violations. US Immigration and Customs Enforcement (ICE) also recently sent subpoenas to law enforcement in Denver and New York seeking information on immigrants who the agency hopes to deport.