The joint Parliamentary (Commons and Lords) Human Rights Committee has agreed with civic and church campaigners for migrants rights that changes to the Highly Skilled Migrants Programme in 2006 breached human rights.
The attempt to engineer tighter rules could force thousands of highly skilled migrant workers out of the UK. They are unlawful and should be scrapped, MPs and peers on the committee declared.
It added that many people offered permanent residence in the UK now faced deportation, contrary to proper standards of fair treatment and due process.
The Home Office said it had to guard against the "risk of abuse", but the Human Rights Committee's response is the latest in a series of humiliating judgements against New Labour's policies on migration, which critics say lack proportion and compassion.
The Highly Skilled Migrants Programme (HSMP) was introduced by the government in 2002 to encourage workers such as doctors and scientists to come to the UK, offering them the prospect of the right to permanent residence. More than 49,000 people took up the offer, reports the BBC.
However, the rules were tightened last year, with new applicants and applicants for visa extensions having to take part in a points-based assessment. Criteria such as age, English-speaking skills, qualifications and experience of the UK are measured.
The committee said many migrants accepted under the original rules would no longer qualify for permanent residency. They faced the prospect of deportation with their families, despite having made their main home in the UK.
"These changes are patently unfair, truly a case of moving the goalposts during the match", said Andrew Dismore MP, chair of the
The report criticised the government's use of an "unconstrained power" in the Immigration Act to implement the new regulations.
This was a clear breach of the right to respect for home and family life contained in Article 8 of European Convention of Human Rights.
The report said: "The changes to the rules are so clearly incompatible with Article 8, and so contrary to basic notions of fairness, that the case for immediately revisiting the changes to the rules in Parliament is in our view overwhelming."
Civil rights groups are welcoming the Parliamentary Human Rights Committee's comments.