Vince Cable has condemned as "stupid and offensive" the Home Office's use of adverts encouraging illegal immigrants to "go home, or you'll be picked up and deported."
The Business Secretary said the signs, which were paraded through six London boroughs on the back of a lorry, were designed to stoke unnecessary fears about immigration.
Mr Cable told BBC One's Andrew Marr Show the Liberal Democrats had not been consulted about the van campaign, rubbished "misleading" targets to reduce net migration, and insisted Britain did not have a vast problem with illegal immigrants.
He said: "It was stupid and offensive. I think it is very unlikely it will continue."
He further questioned whether illegal immigrants have the "sophisticated grasp of English" required to understand the message at a distance.
He said: "It is designed, apparently, to sort of create a sense of fear (in the) British population that we have a vast problem with illegal immigration.
"We have a problem but it's not a vast one. It's got to be dealt with in a measured way dealing with the underlying causes."
Asked about today's report from the Public Administration Select Committee, which said that migration statistics are "little better than a best guess" and probably understate migration into the UK, Mr Cable said: "We are not a totalitarian state. We don't count every single person but actually it's quite difficult being an illegal immigrant in Britain.
"You can't work, certainly legally, you can't have access to benefits. So, the idea that there's some vast, hidden army of people, is almost certainly completely wrong.
"It only really matters if you are pursuing some target. There's this sort of net immigration figure, which the Conservatives are very preoccupied by.
"It's not a government objective, make it absolutely clear.
"This idea that you are pursuing a net immigration figure is very misleading because, amongst other things, the largest number of people counted as immigrants are overseas students, who are not immigrants, they are visitors but under the United Nations classification they are regarded as immigrants, but they are good for the country.
"So obsessing about this net immigration number is not helpful."