David Cameron has outlined plans for "significantly less" immigration to the UK from outside the European Union.
The Tories say immigration is an issue which cannot be ducked
In his first major statement on the issue, Mr Cameron stressed the possible economic benefits of migration.
But there must be limits to immigration levels because of the impact on public services, the environment and on "community cohesion", he said.
Home Secretary John Reid said Tory opposition to ID cards meant their plans were unworkable.
The launch of the Conservative policy on economic migration comes with Labour ministers expected to unveil fresh measures in the Queen Speech next week.
The Conservatives have been reluctant to talk about the issue since last year's general election, as party strategists believe former leader Michael Howard's focus on the issue helped the party lose the poll.
But opinion polls suggest the issue continues to be a key one for voters.
The party's proposals are set out in a pamphlet, Controlling Economic Migration, written by Mr Green and shadow home secretary David Davis.
They propose annual limits on economic migration, worked out in yearly consultation with local authorities, businesses and others.
Limits would reflect economic need, pressure on public services, environmental impact and "community cohesion".
Mr Cameron told the BBC: "We are saying yes, look at the economic benefits of migration, make sure we make the most of them, but then actually have a limit which is set according to the pressures on health and education and housing. That's sensible politics."
The Tories concede they can not stop EU immigration, but annual limits could mean "significantly less" than current levels.
But asked what reduction he envisaged, he said: "We can't put numbers on that today, because we are some way away from the election and the circumstances that we would be in at the time."
Conservative proposals include separating asylum policy from economic migration policy and a border force to enforce policy and deal with over-stayers and illegal workers.
Mr Reid, who this summer revamped government policy on immigration, called the Tory plans "meaningless" while they did not back ID cards.
He also said the number of people allowed into the UK under the points-based system for skilled workers, would also take into account impacts on schools, housing and hospitals.
For the Liberal Democrats, home affairs spokesman Nick Clegg said: "It simply doesn't add up to advocate the economic benefits of immigration on the one hand, and then claim that a Conservative government would significantly cut inward immigration without specifying how this would happen."
Nigel Farage, leader of the UK Independence Party, which wants zero net immigration, said the Tory proposals were "a step in the right direction, but too little too late".
"They don't address the fact that we still have an open door policy to 450m people from the EU," said Mr Farage.
Labour MP and former minister Frank Field, who called at the start of the summer for effective immigration control, welcomed the Tory proposals but also called for limits on migration from new EU states.