Conservatives in government will fail to meet their target of cutting net migration from the hundreds to the tens of thousands by May 2015, business secretary Vince Cable has declared.
The pledge was included in the Tories' 2010 manifesto and became coalition policy, but Lib Dems have always been suspicious of it.
It has resulted in a substantial cut in the numbers of overseas students - relied on for the high fees they pay by the higher education sector - and has now been criticised by Cable.
He told the BBC: "The idea it should come down to 100,000 is something the Liberal Democrats have never signed up to because we simply regard it as impractical."
Around 15% of overseas students remain in the UK when they should leave.
But MPs have recommended they should not be included in migration figures because they are currently the easiest target for ministers seeking to cut the number of new arrivals.
"It's not sensible to have an arbitrary cap because most of the things under it can't
be controlled," Cable added.
"So it involves British people emigrating - you can't control that.
"It involves free movement within the European Union - in and out.
"It involves British people coming back from overseas, who are not immigrants but who are counted in the numbers.
"So setting an arbitrary cap is not helpful, it almost certainly won't achieve the below 100,000 level the Conservatives have set anyway, so let's be practical about it."
Latest research from the British Social Attitudes survey says over three-quarters of Britons want immigration to be cut.
Of those, 56% want immigration to be cut 'a lot', and 21% 'a little'. Only four per cent want immigration to increase.
"Concerns about immigration are a mixture of the economic and the cultural," British Future director Sunder Katwala wrote in a comment piece for the Independent.
"People believe high levels of migration have been badly managed in recent years, yet understand that migration will be part of the modern world in which Britain must compete too.
"For most, the question is less whether to open the borders or slam them shut - but how to actively manage the pressures to secure the benefits."
The issue is set to overshadow this spring's European elections, when Ukip is expected to present a severe challenge to the Tories on the issue.
Leader Nigel Farage told the Today programme this morning he would refine his party's policy of imposing a five-year moratorium on all inward migration, apart from issuing time-limited work permits for skilled workers.
He questioned the economics of migration because "nobody is adding up the cost of in-work benefits" like housing benefit.
And Farage said he would "rather not be slightly richer" if given the choice between a modest increase in GDP and not having five million more people arrive in Britain.
"The one difference between Ukip and the other three established parties is they opened the doors to total uncontrolled immigration from 29 million poor people in Romania and Bulgaria," he added.