Widespread abuse has scuppered a pilot scheme that allowed employers in the hospitality sector to recruit up to 9,000 low-skilled workers each year from outside the European Union.
The Home Office launched the Sector-Based Schemes in May 2003 to help the hospitality and food-processing sectors fill skills gaps.
But the scheme was being used to gain illegal entry to the UK. Foreign agencies were applying for fictitious jobs, without the knowledge of the named companies, and workers who filled legitimate jobs were failing to leave.
Many applicants were turned away because they had fraudulent documents, were under-age, or could not prove they would leave after a year.
While the food-processing SBS will run for another year, the hospitality pilot will not be renewed, although new permits will be issued until 31 July or until the full quota is reached.
The Home Office believes hospitality can turn instead to workers from the new EU accession states. These countries filled 42,070 UK vacancies between May 2004 and March 2005, compared with 8,665 SBS-permit holders.