Teachers and doctors are given their say on immigration quotas

Immigration Minister Liam Byrne said decisions on migration could not be taken in secret and admitted public confidence in the system had been shattered and must be rebuilt.

He went on to make a key concession to the groups feeling the brunt of Labour's open-door policy - teachers, police, magistrates, council workers and Health Service staff.

They will sit on an immigration panel, meeting for the first time on June 21, to assess the "social impact" of mass migration. The findings will help decide how many non-EU migrants are granted work permits every year.

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Ministers have based past decisions solely on the needs of the economy, which benefits from cheap migrant labour and low wage inflation, with no public debate.

Despite yesterday's move, public sector workers and the Government itself will still have no say over the number of migrants from EU countries, who account for half of those entering the UK.

Because of treaties signed by the Government, restrictions cannot be placed on the movements of EU citizens.

Mr Byrne, addressing business leaders in London, said changing the way decisions on immigration are taken is the only way to restore trust in a system that had suffered three big "shocks".

'First, the huge spike in asylum claims we saw at the turn of the century. Then, the unpredicted influx of newcomers from the new Eastern Europe. And last year, the crisis of foreign prisoners released without a review of whether they should be deported."

Mr Byrne went on: "If we're to rebuild trust in the immigration system, we have to be open and candid about the choices we have. In the 21st century we can't take decisions in secret."

Mr Byrne said that between 1990 and 2005 the UK gained "just" 1.6million legal migrants, compared with four million in both Spain and Germany.

But he accepted that asylum and the unprecedented number of arrivals from Eastern Europe had badly damaged confidence in the system.

There must be a "new transparency for setting immigration policy that listens to business and local communities".

Mr Byrne also promised a "change of priorities so those who threaten Britain are sent home first".

This will involve placing foreign criminals at the top of the list for deportation, ahead of failed asylum seekers.

He also pledged to reform citizenship policy to create a "clearer, fairer path for new migrants to earn citizenship".

The new immigration panel, called the Migration Impacts Forum, will have representatives from local education authorities, councils, magistrates, police and the NHS, as well as business leaders.

Chaired by Mr Byrne and Communities Minister Phil Woolas, it will provide an assessment of how the country is coping with immigration to the Migration Advisory Committee.

This body will decide how many migrants should be allowed in from outside the EU. A new points system will then be used to hand out work permits.

Sir Andrew Green, chairman of the think-tank Migrationwatch UK, said: "This is welcome if long overdue. It is high time that the costs of mass immigration on our public services were properly evaluated.

"They far outweigh the economic benefits of immigration on this scale."

• A generation of children is in danger of going "from school straight to welfare" while migrants fill skill shortages in the economy, the British Chambers of Commerce has warned.

Director general David Frost said 500,000 18 to 24-year-olds were out of work. But nobody seemed to notice because immigrants had taken their place in the jobs market.

Mr Frost backed the Government's decision to take into account at last the "enormous social consequences" of mass migration. But he warned that significant damage had already been done.

He said: "Skilled, work-hungry migrants are masking the tragic lack of skills so many of our school leavers have.

"A generation is in danger of going from school straight to welfare with no experience of work and the Government must recognise the danger that this presents."

It follows a similarly blunt warning from the BCC that young British workers are being "displaced" in the job market by migrants, including Eastern Europeans.

Mr Frost told a policy seminar earlier this year that new arrivals from countries such as Poland are coming with degrees, but are willing to take non-graduate jobs. This left Britons without degrees with nowhere to turn.