Vince Cable has hit out at suggestions that immigrants should pay a £1,000 security bond after a Liberal Democrat former minister quit Parliament in protest.
The Business Secretary said he had sympathy with criticism from Sarah Teather, who complained that some coalition policies had left her "desolate".
But he insisted the Brent East MP "overreacted" and promised to make Tory Home Secretary Theresa May more "sensible" over the issue.
The intervention, in an interview on BBC Radio 4's Today programme, comes as the Lib Dems prepare to kick off a crucial party conference season.
Ms Teather raised tensions at the weekend by announcing she will step down from the Commons at the next general election.
The MP, who was sacked as schools minister by Deputy Prime Minister Nick Clegg last year, said she felt "frustrated and disappointed" and that "something broke" inside her when the Lib Dems backed the £26,000-a-year household welfare cap.
She became "catastrophically depressed" and "utterly desolate" when Mr Clegg floated plans for some immigrants to pay a £1,000 bond.
Mr Cable said he "respected" Ms Teather.
"We have obviously debated these things. I think some of the things that she has been saying specifically about the immigration policy I have some sympathy with and have expressed them," he said.
"But I think she has probably overreacted, and I am very, very sorry that she is going to be leaving us at the end of this Parliament."
He went on: "There is a very positive story to tell alongside the things that she is worried about.
"What Nick Clegg actually proposed was that if somebody in the subcontinent, for example, is turned down for a visa, they could as an alternative come up with a bond.
"Had that proposal been accepted I think most people would not have seen a problem with it. It would actually have made it easier for people to come who have good reason to do so.
"But the way some of our colleagues in the coalition interpreted it was in a much more negative way, of saying that everyone who comes here should pay this very large bond and that is what Sarah reacted against.
"In government certainly I and Nick and others will be arguing for a much more sensible and flexible approach to the bond, which is of course not policy and still only under discussion."
Asked if he wanted Mrs May to change the plans, Mr Cable replied: "I think so. We are going to have to do this in a much more sensible way."