A BLUNDER that meant the number of foreign nationals working in the UK was under-estimated by 300,000 has been condemned as a sign of chaos within the government.

Damian Green, the shadow immigration spokesman and Ashford MP, said he was staggered by the mistake.

“It is another sign of chaos in the Government’s handling of everything to do with immigration. If you under-estimate by 300,000 the number of people who have arrived here, then you have no chance of making a proper assessment of what the labour market needs and what public services need.

"It is shocking but not surprising that the government has made this kind of error over such a long period.”

Home Secretary Jacqui Smith apologised for the mistake and admitted it was “bad” the wrong figures were given out on foreign nationals since 1997 but said 2.7million new jobs had been created under Labour.

The number of foreign workers in the UK since 1997 is now thought to be 1.1million, not the 800,000 officially recorded.

Meanwhile, Mr Green rejected criticism of his own party over its failure to put a figure on the number of immigrants it would allow to come to the UK each year.

“We will consult businesses, local authorities and housing providers to see what the annual limit should be so it would be foolish to pluck a figure out of the air. It will be difficult to know what will be happening in 2009 or 2010, which is when these decisions would be taken,” he added.