Restrictions on Bulgarians and Romanians who want to work in the UK will remain in force until at least the end of next year, the Home Office says.
Ministers under-estimated the scale of immigration from eastern Europe
Curbs were imposed before the countries joined the EU in January, amid concerns about eastern European immigration.
The curbs restrict the numbers of unskilled workers, but do not affect the self employed.
It comes as ministers admit other figures on foreign workers in the UK since 1997 were out by 300,000.
They had said there were 800,000, but now say the figure is closer to 1.1m.
Home Office minister Liam Byrne said the decision to leave the restrictions in place had been made at a Cabinet meeting on Tuesday.
He said the move was intended to achieve a "prudent balance" between the needs of the economy and the impact on public services.
The restrictions limit low-skilled migrant workers from Bulgaria and Romania. Only 20,000 were able to seek jobs in agriculture and food processing under a specific scheme.
But EU rules mean Romanians and Bulgarians are free to live in the UK, and to take any job if self-employed. The curbs also do not affect students, who can seek part-time work.
When 10 nations, including eight former communist states, joined the EU in 2004, the UK was one of the few countries to adopt an "open door" policy - allowing unfettered access to its labour market.
The government predicted 15,000 migrant workers would arrive each year. Instead 600,000 arrived in two years.
Mr Byrne said the restrictions on Bulgarian and Romanian workers could remain in place until 2011 if necessary.
He said the numbers of migrant workers from all accession countries were "lower than they were a couple of years ago".
He was asked why he was making the announcement now, when the restrictions were not due to lapse until the end of 2008 anyway.
Mr Byrne told the BBC the government had said the restrictions would be reviewed annually, when they announced the plans last year.
"We will of course review these again after 12 months. But for now the restrictions will stay," he said.
He also said "sweeping changes" to the immigration system were pending - with compulsory ID cards for foreign nationals, tougher policing of ports and airports, and the introduction of an Australian-style "points system".
Sir Andrew Green, of Migration Watch, welcomed the decision to extend the restrictions, saying it was the only possible thing to do.
He told the BBC's World at One programme: "The government's own projections are showing that our population will grow, in the UK, by 10.5m in the next 25 years - 70 % of it due to immigration.
"What that means is we will have to build a Birmingham every two and a half years. So either we start a massive building programme now or we get the numbers under control."
UKIP leader Nigel Farage said: "They can keep their restrictions going until the next decade, but they will be as much use as a chocolate fireguard."