New figures show how difficult it will be for the Government to meet its pledge to cut net migration to the tens of thousands, analysts say.
The Migration Observatory at the University of Oxford said today's figures - showing a "statistically significant" increase - were the second highest on record.
Today's figures show how difficult it would be to reduce net migration to the 'tens of thousands'.
Net migration has risen even despite new restrictions on family, work and student visas that were introduced during the last parliament.
Net long-term migration into the UK surged to near record levels last year, new figures show.
The Office for National Statistics (ONS) said net migration increased to 318,000 in 2014, a "statistically significant" rise of more than 109,000 from the previous year.
The figure is just shy of the 2005-peak level of 320,000.
Confirmation of the rise came as the Government promised "radical" action to curb the number of illegal workers coming to the UK.
The news will come as a blow to Prime Minister David Cameron who previously promised to cut the number of people arriving in the UK to the tens of thousands.
The figures - measuring the number of people entering the country minus the number leaving - revealed:
Taking illegal workers' wages will make lives "more difficult" and would not help control immigration, a campaign group has warned.
"Confiscating wages, making people's lives more difficult is not the answer," Saira Grant, from the Joint Council for the Welfare of Immigrants, told Good Morning Britain.
She also questioned the practicalities of the measure, particularly when taking the wages of people working cash-in-hand in low-paid work.
Earlier, Home Secretary Theresa May insisted the plan was "only fair" to British workers.
Home Secretary Theresa May has defended plans to seize illegal workers' wages, saying radical action was "only fair" to British workers.
It was revealed today that police will be enabled to seize the wages of illegal workers as proceeds of crime under new proposals set to be included in next week's Queen's Speech.
Speaking to ITV's Good Morning Britain, Mrs May said: "I think it's only fair to working people, to people who are out there working hard and paying their taxes, that we do deal with people who are here illegally, who have no right to be here in the UK and should be leaving the UK."
Mrs May said the Tories' general election win would enable stronger action on immigration, but refused to comment on whether new figures released today would show an increase in migration.
David Cameron will unveil plans later today for "radical" new laws to control immigration that include seizing the wages of illegal workers.Read the full story ›
George Osborne has set out his plans to help restore Britain's economy by staging the biggest ever sell-off of government and public owned corporate and financial assets this year.
The Chancellor will create a new government-owned company who will be in charge of the sales, which are expected to be worth £23 billion.
UK Government Investments (UKGI) will sell shares in Lloyds Banking Group, UK Asset Resolution assets, Eurostar and the pre-2012 income contingent repayment student loan book.
ITV News Political Editor Tom Bradby reports:
It is part of plans to cut spending by £13 billion by 2017/18.
Speaking at the Confederation of British Industry (CBI), Osborne said: "If we want a more productive economy, let's get the government out of the business of owning great chunks of our banking system - and indeed other assets that should be in the private sector."
A "plan to make Britain work better" will be published over the next few weeks, setting out proposals to improve transport, broadband, planning, skills, ownership, childcare, red tape, science and innovation.
Osborne also addressed the issue of the EU referendum saying he will be "fighting to be in Europe but not run by Europe".
The Home Secretary received her customary frosty welcome at her annual address to the Police Federation today, but if looks could kill, its chairman Steve White would not be long for this world.
The PFEW chair's jokes at her expense met with applause from the audience, and a murderous look from Ms May, who went on to promise further deep cuts to the police.
The Home Secretary is to launch a major independent review into police crime and performance targets.
She wants to "bring transparency to where, how and why targets are being used, and analyse the impact of targets on police officers’ ability to fight crime".
She said: "Information is critical to management and scrutiny. But there is a world of difference between the proper use of data to manage performance and the improper use of arbitrary targets.
"A police force [was] allegedly so intent on meeting Home Office targets about car theft and burglary that it ignored hundreds of young girls being abused in Rotherham and Sheffield."
The Home Secretary has warned of further cuts to police funding in the UK, telling the Police Federation that "delivering more with less can be challenging and difficult".
However, she rubbished reports "that we'll be 'forced to adopt a paramilitary style' of policing in Britain".
She told rank-and-file officers: "I have to tell you that this kind of scaremongering does nobody any good - it doesn't serve you, it doesn't serve the officers you represent, and it doesn't serve the public."
The Home Secretary has told the annual Police Federation conference that they need to stop scaremongering over their complaints about spending cuts.
In a speech, Theresa May said: "For your sake and the thousands of police officers that work so hard each day, this crying wolf has to stop."
She also said that more savings would have to be made in police budgets, saying reform "needs to go much deeper".
Pointing to the Independent Crime Survey, she added that crime had fallen by as much as 25% in England and Wales, despite the cuts already made.
Her comments met with frosty reception on Twitter, with many officers criticising her words.