Nick Clegg has rejected calls for an annual cap on immigration
The Liberal Democrats are considering a plan to channel immigration to certain areas of the country.
Lib Dem leader Nick Clegg told BBC One's Andrew Marr show the South East of England was facing pressure on resources due to its rising population.
He said other countries had shown it was "relatively easy" to target immigration at areas with proven labour shortages and away from crowded ones.
But he rejected Conservative calls for an annual cap on immigration.
"David Cameron wants to enter into a Dutch auction now, entering into implausible caps that can't work, that don't work, that we know round the world doesn't work.
"It might work in his focus groups but it is not actually going to produce the cohesive Britain that I want to see," he told BBC1's Andrew Marr Show.
"What has gone wrong in the immigration debate is that we have now had decades of tough talk and administrative incompetence from both Conservative and Labour governments."
He also warned that because more British people worked overseas than there were foreign workers in the UK "if we simply pull up the drawbridge from one day to the next, we might actually find that we get a less welcome reception in other countries too".
Mr Clegg said other countries had developed ways of limiting immigration to certain areas and preventing them from moving on to more "crowded" areas.
"It is relatively easy, when people register to work, that they do so with local authorities so you know who is working where," he said.
"It is plausible. It works in other countries."
He said population pressure in the South East of England was causing a strain on public services but on a visit to the Borders region of Scotland he had found "some industries are crying out for more people to come to the area to work".
'Tight immigration control'
It comes as an opinion poll suggests the Conservatives could gain support in key marginal seats at the general election if their manifesto includes an annual cap on immigration.
Conservative leader David Cameron has said a Conservative government would seek to limit net immigration to the "tens of thousands" a year as part of moves to stop Britain's population reaching 70 million.
A YouGov poll of 57 key marginal constituencies carried out for pressure group Migrationwatch found that 44% of voters in Labour-held swing seats would be more likely to back the Conservatives if Mr Cameron pledged to set a 50,000 annual limit on immigration.
But the Conservative proposal was criticised by Communities Secretary John Denham, who said it could prevent key individuals such as international heart surgeons or business leaders from coming to the UK if they were the "first person after the cap".
He told Sky News: "We don't think population is going to go to 70 million, so there is a bit of a straw man there.
"We have got tight immigration control - the points-based system that is now in place means that people can only come here if what they are going to give to this country is something we need."
Mr Cameron has stopped short of stating exactly what level the Conservatives' proposed cap on immigration would be set at, but made clear it would be dramatically lower than present levels.
Net immigration - the number of people migrating to Britain over and above those emigrating - reached 237,000 in 2007.
Office of National Statistics figures suggest that the population will rise by nine million to reach 70 million by 2028.