Immigration rate up by over 20pc last year

The increase was bad news for the Government, given its aim of reducing net immigration to "tens of thousands, rather than hundreds of thousands", said the left-leaning Institute for Public Policy Research (IPPR).

Office for National Statistics figures showed net long-term immigration rose to 196,000 last year from 163,000 in 2008.

While four per cent fewer people arrived in the UK last year – 567,000 compared with 590,000 in 2008 – the number who left fell further, by 13 per cent to 371,000.

The number of visas issued to students also rose 35 per cent to 362,015 in the year to June, other Home Office figures showed.

The overall number of visas issued was also up, by eight per cent, and broke the two million mark, rising to 2,076,925, compared with 1,917,460 in the year to June 2009.

The Government's objective of cutting net immigration was "becoming harder to reach", the IPPR said.

"Meeting it looks likely to have serious economic costs for the UK, and may not deliver the political result that the Government seeks."

Immigration Minister Damian Green said the figures showed why the UK "must tighten our immigration system in order to reduce net migration to manageable levels".

"While it is important that we attract the brightest and the best to ensure strong economic growth, uncontrolled migration places unacceptable pressure on public services," he said.

Mr Green added that the Government was still committed to reducing the level of net migration to "tens of thousands each year, not hundreds of thousands".

"We have already placed a temporary limit on non-EU nationals coming to the UK to work and are looking at how we can tighten up the student tier of the points-based system to ensure that every student who comes to the UK is genuine," he said.

The Chartered Institute of Personnel and Development (CIPD) said the sharp fall in the number of work-related visas – an 18 per cent fall for highly-skilled workers – showed the points-based system was "robust and working".

But a further cap on net immigration, as planned by the Government, would lead to a major UK skills problem, it warned.

Gerwyn Davies, the institute's public policy adviser, said UK employers preferred not hire labour from outside the European Union because it was costly and time-consuming, but said many were forced to do so because of a shortages in key skills.

He said: "The reality for employers is that training workers to plug the UK skills gap is a lengthy task."

He added: "The abrupt introduction of a radical cap would therefore leave many employers with a bigger skills problem and tempt employers with global operations to offshore jobs, where they can find the skills."

But Sir Andrew Green, chairman of campaign group Migrationwatch UK, said: "If we are to stem the inexorable rise of our population to 70 million within 20 years, of which 68 per cent will be the result of immigration, economic migrants should be expected to leave after four years and their departure recorded.

"Those who want to stay should qualify through a further points-based system."

He added: "The Government is to be commended for their commitment to cap non-EU economic immigration but that can only be part of the effort."