The deputy head of Russia's migration service has called for limits on the concentration of ethnic minorities in towns and cities across the country.
Russia has seen a surge of activity by far-right xenophobic groups
Vyacheslav Postavnin said their numbers should not exceed 20%, to prevent "enclaves" emerging in which native Russians were outnumbered.
Russia's Prime Minister Mikhail Fradkov on Wednesday unveiled plans to limit the number of foreigners.
Officials put the figure at 10-12 million, most of them illegals.
"According to our calculations, compact habitation by citizens of another country in any district or region of the country should not surpass 17% to 20%, especially if they have a different national culture and religious faith," said Mr Postavnin, quoted by the Vremya Novostei daily.
"Exceeding this norm creates discomfort for the indigenous population."
On Wednesday, Mr Fradkov said that from January 2007, the government would bar foreigners from certain retail sectors, including the sale of alcohol and pharmaceutical goods.
And from April next year, the ban will be extended to cover foreigners working in all markets and street kiosks. They are among the most important sources of employment for migrant workers, along with the construction industry.
These measures are the toughest yet in a campaign against illegal immigration, says the BBC's Russia analyst Steven Eke.
The Russian government says it needs to take control of the huge number of foreign workers - many of them in Russia illegally.
But human rights activists say many of the measures are pandering to widespread racism.
They say such measures help fuel xenophobia, by portraying foreign workers from the former Soviet republics - typically from the Caucasus and Central Asia - as responsible for crime and social problems.