Tens of thousands of migrant workers from Romania and Bulgaria are to be blocked from working in Britain amid concerns that economic migration is placing new strains on public services.
The Observer can reveal that Home Office officials do not believe the doors should be opened to the two eastern European countries and will recommend that current EU restrictions should continue for at least another year.
Estimates of the number of Romanians and Bulgarians who would come to Britain if restrictions were lifted range between 40,000 and 300,000.
The plan has put the Home Office on a collision course with the Foreign Office, which is leading calls for the ban to be lifted. The impending row highlights deepening divisions in Whitehall over the best way to tackle economic migration, and comes at the end of a week in which three chief constables called for greater resources to cope with an influx of immigrants from eastern Europe.
Privately, senior Home Office officials share some of the chief constables' concerns. And ministers have been alarmed that initial predictions about the influx of workers from countries such as Poland have turned out to be massive underestimates. In 2005 there was a net migration of some 400,000 into Britain, mainly from eastern Europe. The government was expecting only 185,000.
In addition, a number of local councils such as Westminster and Slough say that even up-to-date figures from the Office of National Statistics do not reflect the true influx into their boroughs.
Tight restrictions on Bulgarians and Romanians seeking work in Britain were announced last year. The Home Office pledged to review the restrictions annually. But its recommendation that the ban should be continued is likely to be criticised by the Romanian and Bulgarian governments, which complain about second-class treatment.
A new points-based system for immigration is to be introduced in April, and the Home Office wants this to bed down before making a decision to open the doors to Romanian and Bulgarian workers, as Britain must do by 2012 at the latest. A fear of increasing pressures on local services is also understood to lie behind the Home Office's reluctance.
But the Foreign Office believes this view is misguided. Whitehall sources say it has drawn up a document arguing that continuing the ban is not in Britain's interests and that it should now be relaxed. The Foreign Office document says only a small number of Romanians and Bulgarians will come if the laws are relaxed, with the majority going to Greece, Italy and Spain, with which they have stronger ties.
It also warns that continuing to bar Romanians and Bulgarians from working here legally will force them onto the black market, leading to exploitation and a loss of tax revenue.
This view is shared by many experts on the impact of migration. 'We urge the government to fully open up the labour market,' said Jill Rutter, senior research fellow with the Institute of Public Policy Research. 'Studies show it is social networks that propel migrants here. The numbers of Bulgarians and Romanians in Britain are so small there are no social networks to attract them.'
She said it was time for the government to widen the debate. 'We have seen enormous benefits from migration that have gone to employers and the Treasury, but we haven't seen any talk of how some of the money should be channelled to hard-pressed public services.'