David Blunkett has rejected suggestions the UK will take measures aimed at discouraging people from new EU states from coming to Britain to work.
UK is not imposing restrictions on new EU member states
Tony Blair indicated last week that Britain was looking at tighter controls to limit migration from Eastern Europe.
But the home secretary insisted the UK needed and welcomed new workers.
However, he told the BBC, steps would be announced "shortly" to stop the UK becoming a magnet for people who want to claim benefits and not work.
Mr Blunkett told BBC Radio 4's World at One: "There's a real challenge to make sure we don't act as a beacon in relation to benefits and housing and social services."
The UK needs immigrant workers from eastern Europe, he said: "We need it not just in London and the South East but Scotland is also crying out for labour.
"The growth in our economy has been so much more substantial than other parts of Europe. That's a positive thing."
He said a statement would be made soon about "how we embrace those who come legitimately to work, rather than people exploiting the benefits system."
During Prime Minister's Questions last Wednesday Mr Blair hinted at new measures to limit the number of people arriving from new EU countries.
That came after Tory leader Michael Howard said nearly every other EU member state had imposed controls to limit the possible influx.
Mr Blair replied: "We will take whatever measures are necessary in order to make sure that the pull factor is closed off."
On 1 May 10 countries, including Hungary, Poland and the Czech Republic, are set to join the EU.
Mr Howard said that although he welcomed the new members, the UK had opted not to impose "transitional controls on the free movement of citizens".
Mr Blair replied: "The point you raise is a justified one. It is important that we recognise that there is a potential risk from these accession countries of people coming in.
"It's precisely for that reason now that we are looking at the concessions we gave and if it is right that closing off those concessions is going to mean we deal with this problem, then we will do so."
There have already been indications hat the government is looking at issues like eligibility to benefits for people arriving in the UK - a system which Mr Blair suggested was "too generous" at present.
Mr Blair's official spokesman on Monday said: "The government remains committed to ensuring that the UK labour market is opened up to those who genuinely want to come here and work.
"But clearly we will not tolerate people who simply come here benefit shopping as such."
Mr Blunkett endorsed Mr Blair's call for a clampdown on attempts to claim benefit fraudulently, but stressed that this was not the same as trying to stop workers from Eastern Europe from coming here.
"We have said employment is welcome because it is better to have it legally than clandestinely," he said.
The UK and Ireland are the only EU countries to have decided not to impose work restrictions on people from new member states.