One in four babies born to mothers from overseas
They also revealed that net migration to the UK soared by more than 20 per cent, fuelled by growing numbers of overseas students and a drop in the number of Britons leaving to live abroad.
The increase was bad news for the government, given its aim of reducing net immigration to "tens of thousands, rather than hundreds of thousands", the left-leaning Institute for Public Policy Research (IPPR) said.
Net long-term immigration rose to 196,000 last year from 163,000 in 2008.
While 4 per cent fewer people arrived in the UK last year - 567,000 compared with 590,000 in 2008 - the number who left fell further, by 13 per cent to 371,000.
The number of visas issued to students rose 35 per cent to 362,015 in the year to June, other Home Office figures showed.
The overall number of visas issued was also up, by 8 per cent, and broke the two million mark, rising to 2,076,925, compared with 1,917,460 in the year to June 2009.
But there was an 18 per cent fall in visas for highly-skilled workers - down to 28,410 from 34,555 - and a 9 per cent drop in the number of visas for skilled workers - down to 66,140 from 72,570.
The number of temporary employment visas was also down by 17 per cent to 66,495 from 79,890 in the year to June 2009.
The figures also showed the number of people granted settlement in the UK rose 37 per cent to 224,390 in the year to June, up from 163,660 in the year to June 2009.
The government's objective of cutting net immigration was "becoming harder to reach", the IPPR said.
"Meeting it looks likely to have serious economic costs for the UK, and may not deliver the political result that the government seeks."
Immigration minister Damian Green said the figures showed why the UK "must tighten our immigration system in order to reduce net migration to manageable levels".
"While it is important that we attract the brightest and the best to ensure strong economic growth, uncontrolled migration places unacceptable pressure on public services," he said.
Mr Green added that the government was still committed to reducing the level of net migration to "tens of thousands each year, not hundreds of thousands".
"We have already placed a temporary limit on non-EU nationals coming to the UK to work and are looking at how we can tighten up the student tier of the points-based system to ensure that every student who comes to the UK is genuine," he said.
The sharp fall in the number of work-related visas showed the points-based system was "robust and working", the Chartered Institute of Personnel and Development said.
But a further cap on net immigration, as planned by the government, would lead to a major UK skills problem, it warned.