The key measure - the difference between the number of people entering and the number leaving - was an estimated 330,000 in the year to March.
This is 10,000 above the highest figure on record, which was 320,000 for the year ending June 2005, and an increase of more than a third compared to the same period last year.
Immigration Minister James Brokenshire said the new figures are “deeply disappointing”.
It is the fifth consecutive quarterly rise in the index - raising new questions about the Tories’ aim to bring the number below 100,000.
The increase was driven by a record 269,000 EU citizens arriving in Britain.
Statistics also showed, as expected, that Britain’s foreign-born population has surpassed eight million for the first time.
The Government insists it is acting to control immigration and claimed the figures should be a “wake up call for the EU” amid an unprecedented surge of arrivals into the bloc.
“These stark figures are deeply disappointing,” said Mr Brokenshire.
“While these figures underline the challenges we need to meet to reduce net migration, they should also act as a further wake-up call for the EU. Current flows of people across Europe are on a scale we haven’t seen since the end of the Second World War.
“This is not sustainable and risks the future economic development of other EU member states. It reinforces the need for further reform at an EU level as well as within the UK.”
He said the Government has slashed student fraud, struck off nearly 900 bogus colleges and toughened access to welfare and housing.
“But with nearly 100,000 non-EU students remaining in the UK at the end of their courses and British business still overly reliant on foreign workers in a number of sectors, there is much more to do,” the minister said.
“That’s why our new Immigration Bill will further address illegal working, the pull factors that draw migrants to Britain and the availability of public services which help them to remain here unlawfully.”
“We have asked the Migration Advisory Committee to provide advice on significantly reducing economic migration from outside the EU. We will negotiate with the EU to reform welfare to reduce the financial incentives that attract EU migrants to the UK.
“And our long term economic plan will see many more young Britons given the training and skills they need to fill the jobs our growing economy is creating.”
Labour MP Keith Vaz, chairman of the parliamentary home affairs committee, said: “These record breaking figures are shocking. Only one month ago Theresa May told the home affairs committee that net migration of under 100,000 was her target.
“This is clearly not going to happen. Broken promises on migration do not build confidence with the public. We need a radically different approach.”