GEORGE Osborne appears to have admitted defeat on the Tory pledge to bring annual net immigration below 100,000 by the general election.

The Chancellor said progress had been made on reducing numbers, but suggested Britain's relationship with the EU would need to be renegotiated after May 2015 to deliver David Cameron's promise.

He also warned that border controls will be loosened again if Labour returns to government next year.

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Official figures showed net migration - the number coming to the UK for at least a year, minus the numbers leaving - rose 58,000 to 212,000 in the year to September 2013.

Mr Cameron has rejected calls to drop the target, arguing it is still "achievable", but refusing to offer a "cast- iron guarantee".

Home Secretary Theresa May has conceded it has become "more difficult".

In an interview, Mr Osborne suggested that the EU membership renegotiation - due to take place if the Tories win the general election - will have to be completed in order to bring immigration down to the tens of thousands.

Shadow immigration minister David Hanson said: "George Osborne has admitted the Government will fail to meet its own net migration target, despite David Cameron's promise.

"His claims about Labour are just a smokescreen of desperate falsehoods to divert attention from the Government's failure.

"This Government's record has been a fall in criminal deportations, a weakening of border control and a failure to tackle exploitation at work."