Ministers were left predicting yesterday that a falling pound would help to curb immigration as figures showed the arrival of more than half a million new foreigners last year.

The figures represent the second-largest increase in new arrivals on record and an overall rise in the net figure on last year. The Conservatives said that they proved that the Government had lost control of immigration. Ministers said that the official figures did not reflect current trends, and released statistics showing a fall in demand for work permits from Eastern European workers.

Phil Woolas, the Immigration Minister, said the falling pound was reducing the value of foreign workers’ remittances while the economies of countries such as Poland were booming. The estimated number of people arriving to live in Britain for 12 months or more was 577,000 last year, compared with 591,000 in 2006, while the number of people leaving the country fell from 400,000 to 340,000 over the same period, according to the Office for National Statistics.

The net increase of 237,000 — up 46,000 from last year — takes Britain’s population to a little under 61 million, at least 1.8 million more than the 1997 figure. Mr Woolas was forced to deny that Labour planned to match Tory policy and introduce a formal cap on new non-EU arrivals after telling The Times that the Government would never allow Britain’s population to exceed 70 million.

The Conservatives claimed that tensions between Mr Woolas and Jacqui Smith, the Home Secretary, were hampering effective control. Dominic Grieve, the Shadow Home Secretary, said: “These figures betray a government that has completely lost control over the last ten years. This chaos is likely to increase as the Home Secretary and the new Immigration Minister continue to be at loggerheads.

“The Government should stop squabbling and adopt our policies of an annual limit on non-EU immigration, transitional controls on future EU immigration and establishing a dedicated UK border police force.”

Mr Woolas countered that a new points-based system would help to manage the influx. He added that Home Office figures showed that the number of people from Eastern European countries registering for work in Britain had already declined. “There’s no doubt that the relative values of the pound to other European countries is having an effect,” Mr Woolas said yesterday.

Sir Andrew Green, chairman of Migrationwatch UK, said it was “incredible” that the Government should claim that the points-based system could control immigration. “According to the Government’s own figures, the new system would only have cut immigration by 12,000 if it had already been in operation,” he said. “That is peanuts compared to the 237,000 addition to our population last year alone.”

However, the Institute for Public Policy Research said that there were already signs that immigration was starting to slow this year. Danny Sriskandarajah, its head of migration, said: “Scaremongers spreading panic about immigration fuelling population growth to 70 million fall into the trap of thinking that the next decade will look just like the last. Migration ebbs and flows over time.

“Immigration boomed when the economy was booming, and is likely to slow naturally as the economy slows. If previous recessions are anything to go by, we may end up losing more people than we gain.”

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