The government is preparing a new crackdown on immigration in order to outflank Tory proposals for a strict quota system on migrants.

Alan Milburn, Labour's election strategist in Downing Street, is said to be taking the lead over the plans.

Speaking at his monthly press conference yesterday, the prime minister said that the government was preparing a plan to restrict the numbers coming to Britain for work to those needed in the economy.

"We need to get to a situation where you are absolutely clear that those people coming in on a work permit route are absolutely necessary for our economy to come in," Tony Blair said.