The White House said on Twitter that Dana Boente, US Attorney for the Eastern District of Virginia, would replace Yates, an appointee of former Democratic President Barack Obama, as acting US attorney-general.

Yates on Monday told Justice Department lawyers in a letter that they would not defend in court Trump's directive that put a 120-day hold on allowing refugees into the country, an indefinite ban on refugees from Syria and a 90-day bar on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen.

Yates said she did not believe defending the order would be "consistent with this institution's solemn obligation to always seek justice and stand for what is right."

Trump has argued tougher vetting of immigrants is needed to protect America from terror attacks but critics complain that his order unfairly singles out Muslims and defiles America's historic reputation as a welcoming place for immigrants.

Yates was days away from being replaced by Trump's pick for the top spot at the Justice Department, Republican Senator Jeff Sessions, who is awaiting Senate confirmation.

The White House dismissed her comments as rhetoric and said Trump acted within his presidential powers.

"I think that's a further demonstration of how politicised our legal system has become," said Stephen Miller, a policy adviser to Trump, in an interview on MSNBC.

There have been only a handful of instances in US history of top Justice Department officials publicly breaking with the White House. The most famous example was in 1973, when then-attorney-general Elliot Richardson resigned rather than obey President Richard Nixon's order to fire a special prosecutor investigating the Watergate scandal.

In her letter to Justice Department lawyers, Yates said: "I am responsible for ensuring that the positions we take in court remain consistent with this institution's solemn obligation to always seek justice and stand for what is right."

"At present, I am not convinced that the defence of the executive order is consistent with these responsibilities nor am I convinced that the executive order is lawful."

Yates decision was largely symbolic - Trump's nominee to be attorney-general, Jeff Sessions, is likely to be confirmed soon - but it highlights the deep divide at the Justice Department and elsewhere in the government over Trump's order.

As the top Senate-confirmed official at the Justice Department, Yates was the only one authorised to sign foreign surveillance warrants, an essential function at the department.

"For as long as I am the Acting Attorney-General, the Department of Justice will not present arguments in defence of the Executive Order, unless and until I become convinced that it is appropriate to do so," she wrote.

Ms Yates' action transforms the confirmation of Mr Sessions as attorney-general into a referendum on the immigration order. Action in the Senate could come as early as Tuesday.

The decision by the acting Attorney-General was a remarkable rebuke by a government official to a sitting president that recalls the dramatic "Saturday Night Massacre" in 1973, when President Richard M. Nixon fired his attorney-general and deputy attorney-general for refusing to dismiss the special prosecutor in the Watergate case.

That case prompted a constitutional crisis that ended when Robert Bork, the solicitor general, acceded to Mr Nixon's order and fired Archibald Cox, the special prosecutor.

Ms Yates, a career prosecutor was different because she was a holdover from President Barack Obama's administration, where she served as deputy attorney-general.

She agreed to Mr Trump's request to stay on as acting Attorney-General until Mr Sessions is confirmed.

Several federal judges blocked part of Mr Trump's executive order over the weekend after lawyers representing some of those detained at the airports quickly filed lawsuits. The judges ordered the government not to send detained people back to their home countries.

Mr Trump's executive order drew widespread condemnation from around the globe even as the new policy created chaos and confusion at American airports, where refugees and others who arrived on Saturday were detained for hours.

The new president characterised his order as a way to protect Americans from terrorists, and he insisted in a series of Twitter messages that his order, which named seven predominantly Muslim countries, was not an attempt to single out a religion for discrimination.

But protesters rallied at several airports around the world and Mr Trump received a chorus of bipartisan criticism from lawmakers, academics, corporate executives and human rights advocates as travellers with valid visas or green cards were refused entry back into the United States.

Aides to the president backtracked on Sunday, saying that lawful, permanent residents of the United States would not be barred by the order. But White House officials said the president had no intention of backing down from the order, which continues to shut the borders to refugees and others.

Court motions and hearings are scheduled over the next few days in courtrooms around the country over legal challenges to the immigration order. Questions lingered throughout the day Monday about how and whether Justice Department lawyers in the field would defend the White House order.

Still, Ms Yates' message of legal doubt, coming from the acting head of the Justice Department, sent a powerful signal about the cloud over the order.

New York Times via smh.com.au