Charles Clarke has announced restrictions on low-skilled overseas workers and failed asylum seekers.

The measures form part of a five year plan for immigration which was published yesterday.

Critics say the government has become embroiled in an immigration "bidding war" with the Conservatives - although ministers have stopped short of backing a quota-based system.

Speaking in the Commons the home secretary criticised Tory plans for a fixed quota of refugees and withdrawing from the UN conventions as "unworkable, unjust, counter-productive and immoral".

However, David Davis, the Tory home affairs spokesman, said ministers were presiding over a "confused, weak and chaotic" system.

Writing in the introduction to the five year plan, Tony Blair said Britain would be poorer in every way without centuries of immigration.

But he added: "This traditional tolerance is under threat. It is under threat from those who come and live here illegally by breaking our rules and abusing our hospitality."

Clarke also announced that low-skilled workers from outside the EU will be prevented from settling permanently in Britain.

Only skilled workers will be allowed to remain, with the unskilled allowed to work only for short periods of time.

A Populus poll for the Times suggests immigration is the only one of 12 key policy issues where the Tories are well ahead of Labour.