David Cameron has insisted he can meet his target to reduce net migration to the tens of thousands despite new figures showing the number had soared.
Figures showed net-migration rose to 318,000 last year - the highest figure since 2005.
After announcing new plans to cut immigration, Mr Cameron told ITV News' Romilly Weeks that he would not abandon his target, saying the figures showed "how much work we have to do".
David Cameron's aim to reduce net migration to below 100,000 is "neither achievable not desirable", the Institute Of Directors said.
Simon Walker, director general of the Institute Of Directors, said the Government's target was "difficult to understand" and was "undermining faith in the whole system".
"By setting a target that is neither achievable not desirable, they have only undermined faith in the whole system," he said.
"International students and highly-skilled individuals from abroad bring substantial benefits to the UK, but business groups cannot have a tin-ear to the widespread public unease about immigration.
"Companies need migrants to be able to fill skills gaps, but that is a different issue to making sure immigration law is properly enforced, including cracking down on the small number of bad employers who break the rules."
Make no mistake, these fresh net migration figures are absolutely terrible for the Government.
David Cameron will unveil plans later today for "radical" new laws to control immigration that include seizing the wages of illegal workers.