Conservative policy on immigration is to be reviewed after pressure from senior Cabinet ministers and businessmen.
David Cameron’s proposed cap on immigrants from outside the EU is understood to have been questioned by Michael Gove, the Education Secretary, and David Willetts, the Universities Secretary, after interests in the City said that it could harm the economy.
The Home Secretary Theresa May will consult with colleagues and business interests next week before announcing the revised policy.
It is understood that tensions arose this week in a meeting chaired by Nick Clegg. The Deputy Prime Minister opposed the policy during the election campaign but agreed to support it in coalition negotiations between the Tories and the Lib Dems.