Immigrant families will be kept off council house waiting lists for up to five years, under a crackdown being unveiled by David Cameron.
The Prime Minister is to set out a tougher approach on housing and benefits, promising to tackle the culture of "something for nothing".
The intervention is due in a keynote speech on immigration on Monday.
But shadow immigration minister Chris Bryant said he was "slightly bewildered" about what new power Cameron thought he was introducing. Councils currently have powers to impose local residency tests for social housing, but ministers are frustrated that only around half do so.
Arguing that Britain became a "soft touch" for immigrants under Labour, Cameron will announce that statutory guidance is being issued.
Local authorities will have to introduce minimum residency times of between two and five years for joining waiting lists - or justify why they are not.
The harder line will please the Tory Right, who have blamed the lack of action in such core areas for the party's dismal third place behind Ukip in the Eastleigh by-election.
Concerns have been rising of an influx from Bulgaria and Romania when movement restrictions are loosened at the end of this year.
Research for the Communities and Local Government Department has suggested only around 13,000 will arrive from the two countries.
But Communities Secretary Eric Pickles said this week that he had "no confidence" in the figures, and Migration Watch UK, which wants tougher controls on immigration, has estimated that 250,000 will move to the UK over five years.
Deputy Prime Minister Nick Clegg performed a U-turn last week by abandoning the Liberal Democrats' controversial "earned citizenship" policy, which would allow illegal immigrants to stay once they have been in the country for more than 10 years.
He said such an amnesty now risked "undermining public confidence".
The Prime Minister is likely to cite figures in his speech showing that nearly one in 10 new social lettings go to foreign nationals. The proportion has risen from 6.5 per cent in 2007-08 to nine per cent in 2011-12.
Sources said the move was aimed at "stopping someone from turning up and immediately gaining access to social housing".
Ministers will take steps to ensure British nationals are protected when they move for "genuine reasons" - such as work or family breakdown - by ensuring local authorities retain the ability to set exceptions.
Such protection is already legally in force for members of the Armed Forces.
Cameron is also expected to use his speech to reiterate his commitment to reduce net immigration to below 100,000.
The Bishop of Dudley, David Walker, told the Observer that politicians' response to immigration was "wholly disproportionate".
"Public fears around immigration are like fears around crime. They bear little relationship to the actual reality," he said.
The bishop, who served on the board of the National Housing Federation and is a former chairman of South Yorkshire Housing Association, said: "The tone of the current debate suggests that it is better for 10 people with a legitimate reason for coming to this country to be refused entry than for one person to get in who has no good cause.
"It is wholly disproportionate as a response. It is especially galling in Holy Week, when Christians are remembering how Jesus himself became the scapegoat in a political battle, to see politicians vying with each other in just such a process.
"Studies show that the vast majority of new arrivals to the UK enhance and enrich our society, both economically and culturally.
"The true threats to our national wellbeing lie not with those who come to visit or make their lives here but with the increasing gap between the rich and poor among us."
Chief Secretary to the Treasury Danny Alexander said the Liberal Democrats were working in Government to try to "restore confidence" in the immigration system, adding it was "so full of holes" under the previous Labour government.
He told BBC One's The Andrew Marr Show hosted by Eddie Mair: "If you want a stronger economy, then we need a society that can welcome immigrants to make an economic contribution to our country, that's what I want to see.
"But we also need to have rules in our immigration system that are seen to be fair, that British people can have confidence in and that's the balance that we're trying to achieve through all the difficult choices we've been making in Government and which led to the announcement that Nick
Clegg made earlier this week."
On the council housing proposals, Alexander said it was "sensible to look at the rules around the way social housing is allocated".
He said: "It is sensible to look at the rules too around benefits and access to public services, particularly for people who are here illegally, or who have overstayed their welcome."
He added: "I think it is fair that when we want to have the British public having some confidence that our rules are fair and are properly enforced, that this is precisely the sort of idea we should be looking at, yes."
Immigration minister Mark Harper said he wanted to make sure Britain's rules were "amongst the toughest in the world".
He told the Sky News Murnaghan programme the Government wanted to make sure that people did not come to Britain with an expectation that they could jump the housing queue "when they haven't been here for very long at all".
He said: "What we want to do is have local councils set a residence test so that people with more of a connection to the local area are able to go first on a housing waiting list.
“That's one of the issues that really upsets people when they see somebody arrive in the country and they appear to get better treatment than people that have been there for a long time."
Harper said the committee he was chairing was looking at the benefits system, access to the health service, education and housing.
He said: "It's looking to make sure that if people are coming to Britain, we want the best and the brightest to come from around the world, but we want them to come here to work, contribute, to work hard, just as we want British citizens to do and we want to make sure our rules are amongst the toughest in the world."
Bryant acknowledged that the Labour government "got some things wrong", saying the points-based system was introduced "far too late".
Referring to Estonia, Hungary and Poland joining the EU in 2004, he said: "When they were joining, unlike France and Germany who said I'm sorry you can't come and work here until seven years have passed, we said that people could come here on day one, and that meant that we were going out on a limb a bit and everybody came here."
He added: "Since the Prime Minister came to power, the number of illegal immigrants stopped at our borders has fallen, the number of people absconding from Heathrow has grown and the number of foreign criminals deported has fallen."
Minister for the Cabinet Office Francis Maude told the same programme it was a question of having "sensible controls" and a "sensible approach" to immigration.
He said: "We need to make sure that we are prepared so I think the proposals that are being made at the moment for people to put forward a bond in some circumstances for councils to be able to impose a residency requirement before allowing access to social housing, these are sensible proposals which will enable us to be very welcoming to immigrants."
He said there was "no quota whatsoever" on the number of foreign students coming to study in the country's universities, but added "perhaps we need to be slicker and quicker at dealing with visas".
Mike Jones, speaking for the Local Government Association, criticised the statutory guidance proposals.
He told BBC Radio 4's The World This Weekend: "I'm very concerned about that because I'm a big fan of localism and I want to see councils being able to make their own decisions based on the needs of their local communities and businesses.
"I don't think it's for Westminster to decide who we should or should not be housing."
He added: "If they are in the country legally then we have a responsibility to do things that are right for people and that's housing. Now if we don't house them that means that we are going to have to deal with them under the homeless laws which cost us a great deal more money.
"So I think it's down to local councils to pick and choose how they can actually deliver the housing need within their areas."
He went on: "I think we will get ourselves in a bit of a muddle if we are not careful by having statutory guidance and I think as I say it should be left to councils to determine this."
Jones argued it was "wrong" to put extra burdens on councils, while lack of housing and immigration were two separate issues.
He said: "There are things the Government can do that will help the situation and I think this is a bit of a sideshow."