Net migration to the UK soared by more than 20% last year, fuelled by growing numbers of overseas students and a drop in the number of Britons leaving to live abroad, figures showed today.
The increase was bad news for the Government, given its aim of reducing net immigration to "tens of thousands, rather than hundreds of thousands", the left-leaning Institute for Public Policy Research (IPPR) said.
Net long-term immigration rose to 196,000 last year from 163,000 in 2008, the Office for National Statistics (ONS) figures showed.
While 4% fewer people arrived in the UK last year - 567,000 compared with 590,000 in 2008 - the number who left fell further, by 13% to 371,000.
The number of visas issued to students rose 35% to 362,015 in the year to June, other Home Office figures showed.
The overall number of visas issued was also up, by 8%, and broke the two million mark, rising to 2,076,925, compared with 1,917,460 in the year to June 2009.
But there was an 18% fall in visas for highly-skilled workers - down to 28,410 from 34,555 - and a 9% drop in the number of visas for skilled workers - down to 66,140 from 72,570.
The number of temporary employment visas was also down 17% to 66,495 from 79,890 in the year to June 2009.
The figures also showed the number of people granted settlement in the UK rose 37% to 224,390 in the year to June, up from 163,660 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 sharp fall in the number of work-related visas showed the points-based system was "robust and working", the Chartered Institute of Personnel and Development (CIPD) said.
But a further cap on net immigration, as planned by the Government, would lead to a major UK skills problem, it warned.
Gerwyn Davies, CIPD public policy adviser, said UK employers would rather not hire labour from outside the EU because it was costly and time-consuming, but many were forced to do so because of a skills shortage.
"The reality for employers is that training workers to plug the UK skills gap is a lengthy task," he said.
"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% 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."
* Further ONS figures released today showed births to mothers born outside the UK made up nearly a quarter (24.6%) of all live births in the UK last year.
In Newham in east London, this rose to more than three-quarters (75.7%) - the highest percentage of births to mothers born outside the UK.
The three most common countries of birth of non-UK born mothers were Pakistan, Poland and India, as has been the case since 2007, the figures showed.
Shadow home secretary Alan Johnson said the increase in those coming in through the study route showed that the previous Labour government was right to tighten the rules.
"The Government's recently announced 'cap' will affect less than a third of 1% of those coming to our shores," he said.
"The points-based system works and the Government is foolish to pretend they can improve its effectiveness with an arbitrary cap."