David Cameron today defended his tough stance on immigration as "moderate, sensible and reasonable" after he was accused by Liberal Democrat cabinet colleague Vince Cable of inflaming extremism.
The Prime Minister said it was time Britain returned to the immigration levels of the 1980s and 1990s where the number of people coming to the UK was in the "tens of thousands, rather than the hundreds of thousands".
The UK needed "good immigration, not mass immigration", he told Tory party activists in Southampton as he attacked the "woeful" welfare system which saw Britons languishing on state handouts while foreign workers snapped up new jobs.
But his speech, which comes three weeks before Conservatives and Liberal Democrats face their first major ballot box showdown since joining forces in Government, drew angry criticism from Mr Cable.
The Business Secretary, who has publicly questioned the impact of a cap on foreign entrants on businesses and universities, described the Prime Minister's comments as "very unwise".
"The reference to the tens of thousands of immigrants rather than hundreds of thousands is not part of the coalition agreement. It is Tory party policy only," he told the BBC.
"I do understand there is an election coming but talk of mass immigration risks inflaming the extremism to which he and I are both strongly opposed."
But Mr Cameron said he could not be accused of fuelling extremism and denied alienating his Lib Dem colleagues. Speaking later in Woking, he added: "Firstly, on the issue of immigration, I would say the speech I gave was extremely moderate, sensible and reasonable, and I challenge anyone to read it and come to a different conclusion.
"What I was setting out is what is Government policy - what is agreed coalition policy in terms of controlling immigration properly, which we've debated inside Government, and agreed."
The split was seized upon by Labour. Shadow Home Secretary Yvette Cooper said: "The Tory-led Government's immigration policy is in chaos.
"And now the Business Secretary has said he doesn't even agree with the policy in the first place.
"David Cameron said 'no ifs, no buts' he would deliver on his target to cut net migration to the tens of thousands, yet Vince Cable said that it isn't coalition policy. What on earth is going on?"
Labour MP Keith Vaz, who chairs the Home Affairs Select Committee, said the split in the coalition over immigration policy could be exploited by extremist groups.
He said: "We understand the need to debate these issues and I don't believe that the Prime Minister is wrong to discuss this matter.
"But I do think we should have some clear definitions and some clarity as to where Government policy actually is."
In his speech, Mr Cameron said reducing immigration was "of vital importance to the future of our country" and recognised that in some areas it had caused "discomfort and disjointedness".
And he accused Labour of inflaming the debate by "talking tough" but failing to act, a move which has "created space" for extremist parties.
Mr Cameron said measures such as an annual limit on entrants and a crackdown on "bogus" colleges exploiting student visas meant the Government was "on track" to meet that figure.
The Government would also consult on how to stop people coming to the UK on short-term visas and then settling here permanently.
Deputy Prime Minister Nick Clegg, the Liberal Democrat leader, saw the speech before it was delivered and a source stressed that Mr Cameron was making a party political speech.
"This is a Conservative Prime Minister speaking to Conservative party activists using Conservative language," he said - saying the Lib Dems had "a slightly different opinion".
Local elections in many parts of England, as well as polls for devolved governments in Scotland and Wales and the electoral reform referendum, take place in three weeks.
Lib Dem sources stressed that differences with Mr Cameron were over the tone of his comments, not the policy.
A source close to Mr Clegg said: "The Deputy Prime Minister would not make a speech using this language - he is a Liberal Democrat - but the policy was agreed.
"But this tone and language does not reflect where the Liberal Democrats come from and are on this issue."