Theresa May faced an angry backlash from business leaders and refugee charities for falsely "vilifying" immigrants in a bid to boost her own political career.
The Institute of Directors (IoD) issued a strongly-worded response to the Home Secretary's announcement of a sharp tightening of asylum and immigration rules at the Conservative Party conference.
In what was widely perceived as a pitch for the party leadership, she declared the UK "does not need" large numbers of foreign arrivals, warning they are putting British workers out of a job and forcing down wages.
It also made it harder to create a "cohesive society", she suggested.
Urging party members to "put Britain first", she said she would act to reduce the numbers gaining asylum after arriving in the UK and to make sure overseas students left the country after their courses.
But the IoD accused her of jeopardising Britain's economic recovery with "irresponsible rhetoric and pandering to anti-immigration sentiment".
Director general Simon Walker said: "It is yet another example of the Home Secretary turning away the world's best and brightest, putting internal party politics ahead of the country, and helping our competitor economies instead of our own.
"The myth of the job-stealing immigrant is nonsense. Immigrants do not steal jobs, they help fill vital skill shortages and, in doing so, create demand and more jobs. If they did steal jobs, we wouldn't have the record levels of employment we currently do.
"It is about time the Home Office stopped undermining business and our own Government's efforts to secure productivity growth. Political leaders should stop vilifying migrants and acknowledge the hugely important contribution they make to this country's economy.
"While employers recognise public concerns, heated rhetoric cannot be allowed to prevail over cool-headed leadership. We need a Comprehensive Immigration Review to set out a sensible plan for managing inward migration in a way that supports our economy, works for our businesses, and addresses public concerns."
Her proposals for asylum mark a major departure from the system Britain uses to offer refuge for those fleeing conflict and persecution around the world and appears to be aimed at reducing the numbers coming to the country.
In a hardening of Tory rhetoric, Mrs May took on claims that the UK is a country of immigrants, instead arguing it has had "remarkable population stability" until recently.
Refugee Council Chief Executive Maurice Wren said: "The Home Secretary's clear intention to close Britain's border to refugees fleeing for their lives is thoroughly chilling, as is her bitter attack on the fundamental principle enshrined in international law that people fleeing persecution should be able to claim asylum in Britain.
"The Home Secretary's idea that the few refugees who reach Britain's shores under their own steam are not in need of protection is fundamentally flawed. Becoming a refugee is not solely the privilege of the poor or infirm.
"Everyone would like to see the number of asylum claims in Britain go down: but only because that would mean the world had become a safer, more peaceful place. As it stands, the Home Secretary's ambitions are simply out of step with reality: the world is facing one of the worst refugee crises we've ever seen.
"The global system of refugee protection is based on the principle that everyone has the right to claim asylum and to have that claim examined properly.
"Instead of seeking to close the door on refugees reaching Britain by creating the idea they are somehow unworthy of our help, the Home Secretary should focus her efforts on reforming Britain's asylum system so it treats people with the dignity and respect they so desperately need."