An annual quota regulating the number of immigrant workers entering Britain from outside the EU should be set up, according to the Liberal Democrats.
The Lib Dems say immigrant workers play a vital role in Britain
Mark Oaten, the party's home affairs spokesman, says the system would end widespread confusion between migrant workers and asylum-seekers.
He says foreign workers are needed in highly-skilled and manual jobs.
Under the plans, an independent panel would set the quota after identifying areas of skill shortages.
The panel - which would include representatives of the CBI, trade unions and the public and private sectors - would gather evidence from different sectors of the economy as part of the process.
Senior party aides declined to predict what figure the panel would arrive at, saying the quota would depend on the needs of British business at a specific point in time.
Mr Oaten has cited Treasury figures suggesting that UK economic growth would decline by 0.5% a year without them to support the plans.
The quota system would not affect the right of EU nationals to live and work in the UK, or the right of those fleeing persecution to seek asylum.
However asylum-seekers with particular skills would be able to apply for permission to stay in Britain as migrant workers.
Under the proposals, a US-style Green Card system would run parallel to the mainstream work permit system to enable recruitment in sectors where vacancies cannot be filled by UK or European nationals.
Individuals granted a card could remain in the UK for a fixed period, but would only be allowed to work in sectors where a significant, and unmet,
labour demand has been identified.
Launching the proposals, Mr Oaten said: "For too long, immigration has been a political football that has had severe
repercussions for race relations in Britain."
He added: "The fact is that we need foreign workers to do jobs that cannot be filled by UK nationals.
'Mistrust and suspicion'
"But gross mismanagement and political manoeuvring by successive Labour and Conservative governments has confused the two separate issues of
asylum and immigration, causing an atmosphere of widespread public mistrust and suspicion."
Mr Oaten went on to make his case for the quota system as a means of regulating the use of immigrant workers.
"Decisions about how many immigrants we need are taken behind closed doors instead of out in the open - quotas should be set annually and debated in Parliament," he said.
Mr Oaten suggested that the use of economic statistics would create a system that "benefits the British people and the British economy".