NICOLA Sturgeon has denounced as “morally bankrupt” the leaked UK Government proposals to force a post-Brexit cut in the number of low-skilled migrants to Britain.

The First Minister warned the "dreadful" policy could see families broken up while restrictions on people coming into the UK would be economically "devastating" for Scotland, which has relied on immigrants to boost its population.

Downing Street declined to comment on the leaked 82-page paper and Theresa May did not refer to it directly during Prime Minister’s Questions.

However, she did suggest that she supported a major reduction in unskilled EU migrants, telling MPs that, overall, immigration had been good for Britain but that people wanted it brought down to sustainable levels, “particularly given the impact it has on people at the lower end of the income scale in depressing their wages”.

It is understood that the document - marked ''official sensitive'' and dated this month - is one of several draft versions of a forthcoming White Paper, which has been circulated among senior officials and politicians but has not been agreed by ministers.

The paper states: ''The Government will take a view on the economic and social needs of the country as regards EU migration, rather than leaving this decision entirely to those wishing to come here and employers.”

This could involve requiring EU nationals to seek permission before taking up a job, making employers recruit locally first or restrict access to lower-skilled occupations which are not experiencing staffing shortages, the document suggests.

Among proposals floated to cut numbers of lower-skilled migrants are a restriction to two years' residency, compared with work permits for a longer period of three to five years for those in high-skilled occupations.

Ms Sturgeon said: "The proposals in this paper are morally bankrupt, they seem to ignore the fact we're dealing with human beings. These proposals would lead to family break-up in some cases.

"But secondly they would be devastating for the Scottish economy. We need to be able to attract the best and the brightest from around the world to Scotland, we've got a demographic challenge we must meet if we are to continue to grow our economy.

"So these proposals are dreadful and they are just a sign of the fact that this UK Government has completely lost the plot and completely lost sight of what they should be doing to secure a brighter future for the country," she added.

Labour’s Sadiq Khan, the London Mayor, was equally critical, calling the draft paper "an example of an extreme hard Brexit and a blueprint for strangling the London economy".

Meanwhile, Sir Vince Cable, the Liberal Democrat leader who served alongside Mrs May in the Coalition Government, claimed there had been nine studies on migration, which took in all the academic evidence and which showed immigration “had very little impact on wages or employment”.

The former Business Secretary said: “But this was suppressed by the Home Office under Theresa May because the results were inconvenient.”

In a separate development, Peter Grant, the SNP’s Europe spokesman, insisted it was “vital that the devolved administrations are properly represented at the centre of these negotiations,” pointing out how there had not been a meeting of the intergovernmental Joint Ministerial Committee for seven months.

Whitehall sources have made clear Damian Green, the First Secretary of State, is looking to hold another JMC in October.

Other developments included:

*EU sources said Brussels would block a transitional deal and impose real limits to single market access if the UK pressed ahead with the leaked immigration plans;

*Ian Blackford, the SNP leader at Westminster, called on Mrs May to "stop dancing to tune of her right wing backbenchers" and apologise for the "disgraceful" treatment her Government had shown migrants;

*a group representing some three million EU nationals in the UK said the draft proposals would add to the current "hostile environment" in Britain for EU citizens and

*the British Hospitality Association said the proposals would be "catastrophic" for the hospitality industry.