Strict limits are to be imposed on immigration amid fears that unemployment rises in the economic downturn will fuel racial tension.

Phil Woolas, in his first interview since taking over as Immigration Minister, said that he wanted to see a dramatic reduction in the number of migrants coming to Britain.

In what many will see as extraordinary remarks for a Labour minister, he told The Times that the economic backdrop changed everything. “If people are being made unemployed, the question of immigration becomes extremely thorny . . . It’s been too easy to get into this country in the past and it’s going to get harder,” he said.

Ministers intended to introduce changes to allow it to set a limit on migration, he said. “This Government isn’t going to allow the population to go up to 70 million. There has to be a balance between the number of people coming in and the number of people leaving.”

Until now the Government has shied away from curbing levels of immigration, which have reached record levels under Labour.

Keith Vaz, the chairman of the Commons Home Affairs Select Committee, was shocked by the comments. “I would be astonished at a Labour immigration minister in effect changing the policy,” he said. “His predecessor and the Home Secretary have made it very clear they do not support a quota.”

Habib Rahman, of the Joint Council for the Welfare of Immigrants, said: “This could drive a coach and horses through any notion of managed migration through the Government’s new points-based system . . . on which it held long and detailed consultations before unveiling it as the answer to the country’s economic needs.”

With immigration still a big issue of public concern, Labour is under pressure to toughen its approach after the Tories revealed plans for annual limits on numbers entering the country.

The latest figures estimate that net migration – the gap between those entering and those leaving the country – will run at more than 200,000 a year until 2012. About 70 per cent of population growth over the next 25 years is expected to be a result of migration.

Sir Andrew Green, the chairman of Migrationwatch, which argues for balanced migration, described Mr Woolas’s comments as a potential breakthrough. “It is the first time that a government minister has actually linked immigration and population. If they succeed in delivering, they will have done our country a considerable service,” he said.

The Government’s response to public concern about immigration has been to introduce an Australian-style points system linking migrants’ skills to particular jobs. It is likely that curbs would hit such migrants. The Government cannot, however, curb EU migration and has international obligations to accept asylum-seekers. It would also be reluctant to target students because of the money that they provide to universities. It could curb entry for marriage purposes, although this risks an electoral backlash in seats with large Asian communities.

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