The number of people coming to the UK has fallen by over 80,000 in the last year, according to official figures showing net migration fell by a third.
In the year to September, 153,000 more people came to the UK than left – down from 242,000 the previous year, says the Office for National Statistics.
There was a drop in new arrivals while the number of people leaving rose.
Immigration Minister Mark Harper said the figures showed the government had “cut out abuse” from the system.
The number of immigrants coming to Britain fell from 581,000 to 500,000, while the number of migrants leaving the country was up from 339,000 to 347,000.
Prime Minister David Cameron made cutting net migration – the difference between the number of people coming to and leaving the country – a key pledge in the run-up to the 2010 general election.
A 61,000 drop in the number of people coming to the UK from African, Asian and Caribbean countries
The number of people coming to the UK whose main reason was to “accompany or join others” fell by 18,000
56,000 fewer people coming to the UK to study
A 5% increase in the number of visa applications in the universities sector. But overall a 10% reduction in the number of student visa applications
The Conservatives say they want to reduce the net migration figure from non-EU countries to less than 100,000 a year.
But Sarah Mulley, from the Institute of Public Policy Research think tank, said progress towards the target was “still in large part being driven by falling numbers of international students”.
“This decline in international student numbers comes at considerable economic cost to the UK at a time when we can ill afford it.”
Home Office minister Mark Harper said: “The figures show we have cut out abuse while encouraging the brightest and best migrants who contribute to economic growth”.
He pointed to five per cent increases in both “the number of sponsored student visa applications” and “the number of visas issued to skilled workers”.
“We have made substantial inroads in cutting immigration and now have a more selective system that works in our national interest,” he said.
Labour welcomed the fall, saying the “pace and scale of immigration” had been too high.
But the party’s shadow immigration minister Chris Bryant added that the government, “is not doing enough on illegal immigration, failing to deport, failing to prevent absconding, and failing to take action to stop employers using both illegal and legal migrants to undercut wages.”
“This is the sort of immigration the public worry about rather than international students at our universities, or the number of British citizens leaving or coming home,” he added.
BBC © 2013