Nick Clegg has pledged to block any fresh attempts to curb immigration from the European Union, insisting "this is where we draw the line".
The Deputy Prime Minister dismissed Home Office proposals for a 75,000 cap on EU migrants as "pointless" and claimed without freedom of movement the National Health Service would "fall over".
It comes just days after David Cameron warned that he would veto further expansion of the union's borders unless reforms were agreed to crack down on "benefit tourism".
A ban on EU migrants claiming out-of-work benefits from the moment they arrive in the UK is also being rushed through Parliament to be in place in time for the January 1 lifting of access restrictions on Bulgarian and Romanian nationals.
Migrants from all EU states will have to wait for three months before applying for jobseeker's allowance (JSA) and other out-of-work benefits.
In an article for The Sunday Times, Mr Clegg wrote: "Sticking a big no-entry sign on the cliffs of Dover may be politically popular, but at a huge economic cost. What would happen if tonight every European living in the UK boarded a ship or plane and went home?
"Are we really that keen to see the back of German lawyers, Dutch accountants or Finnish engineers? Do we want the NHS to fall over and the City of London to grind to a halt?"
He said the issue was "the biggest dividing line in politics today" and branded plans for a cap "arbitrary", "pointless" and "distracting".
He added: "Britain would be one step closer to the exit, even though walking away from Europe would cripple the economic recovery that's been so hard won."
As tensions heighten over the possible "influx" of Bulgarian and Romanians from next month, Bulgaria's president criticised the fear tactics being used by some politicians.
Rosen Plevneliev told the Observer: "You see, of course, Great Britain will make its planning and will take its decisions. But some of them could be right, some of them could be wrong. Some of them are bold and some of them are, I would say, not long-term orientated decisions.
"You want to make a plan for a better future for your citizens in Great Britain. In the past 20 years immigrants in Great Britain contributed heavily to its prosperity, and that is a fact. The only thing that is important is not to listen to populist politicians who play on people's fears but to listen to the wise men in Great Britain.
"Listen to the institutions who are giving the facts. University College London has very clear data showing that in the past 20 years immigrants contributed 34% more than they took out. You guys are making profit out of this. So that is really great. Keep it like that."