David Cameron is "disappointed" after missing his net migration target by nearly 200,000, leaving his pledge to reduce it to the "tens of thousands" in tatters.
The Prime Minister and Home Secretary Theresa May had set the target of reducing net migration - the difference between people coming to the UK and those leaving - to below 100,000 by this May.
But the latest figures from the Office of National Statistics show that in the year to September 2014 alone net migration has risen by nearly as much as 100,000 - from 210,000 to 298,000.
It means net migration is now higher than when the coalition came to power in 2010 when it was 244,000. Net migration peaked in 2005 at 320,000.
A spokeswoman for number 10 said Mr Cameron was "disappointed" with the figures and added: "He had said previously that we have not made as much progress as he would like but he had also said that he doesn't regret making this commitment because he thinks it is in the interests of our country, that we will have a better, stronger country, if we have lower net migration."
She said the rise was driven by a jobs rise - Britain's economic growth has been stronger than it's Eurozone neighbours.
However, she denied that the Government had sought to bury the news under the release of the report into the extent of Jimmy Savile's abuse at Stoke Mandeville Hospital.
The release of the data by the ONS is significant because it is the last set of quarterly net migration figures ahead of the General Election.
Speaking on his weekly LBC radio show, Deputy Prime Minister Nick Clegg said the Tories would have to "suffer the embarrassment of having ... failed spectacularly to deliver".
"I said to David Cameron he shouldn't make the commitment because it was inevitable he was going to break it because you can't control the net figure," Mr Clegg said.
However, Immigration Minister James Brokenshire said: "As we have said for some time, we have been blown off course by net migration from within the EU, which has more than doubled since 2010.
"That's why we need to continue to crack down on the abuse of EU free movement and continue our reforms to make our welfare system fairer and less open to abuse."
The ONS figures for the year ending September 2014 showed:
:: The number of foreign people coming to live in the UK increased significantly from 530,000 to 624,000 in a year
:: The number people from outside the EU moving to the UK increased by 49,000 to 292,000
:: The number of people from the EU coming to the UK rose by 43,000 to 251,000
:: 37,000 Romanian and Bulgarians immigrated to the UK in the year ending September 2014, up from 24,000. Of those, 27,000 came for work.
:: The number of foreign people coming to the UK to study increased from 175,000 to 192,000
Sunder Katwala, director of the British Future think-tank, said: "The ONS statistics have become a quarterly reminder to the public of why they don't trust politicians on immigration, thanks to the net migration target.
"If the Prime Minister remains in denial about the broken target, he is setting himself up for five more years of failure. It is already clear there is next to no chance of meeting the same target in the next parliament either."
However, Migrants' Rights Network director Don Flynn cautioned: "The latest migration figures reflect Britain's growing economy and should not be used by the political parties as a launch-pad for their negative political campaigns shifting the blame for wider problems on to migrants."
Madeleine Sumption, director of the Migration Observatory at the University of Oxford, said: "UK job growth is likely to be a key factor behind the recent increases."
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