John Cridland, director-general of the employers' group CBI, said skilled migration had been "positive" for the UK economy, and called for the net migration target to be scrapped.
"Businesses stand ready to play their part in helping the government develop a properly managed migration system that shows that Britain is open for business," he said.
Simon Walker, director-general of the Institute of Directors, was even more scathing, accusing Ms May of "irresponsible rhetoric and pandering to anti-immigration sentiment", adding she was putting "internal party politics ahead of the country".
"The myth of the job-stealing immigrant is nonsense," he said. "Immigrants do not steal jobs, they help fill vital skill shortages and, in doing so, create demand and more jobs.
"It is about time the Home Office stopped undermining business and our own government's efforts to secure productivity growth."
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The home secretary is widely touted as a possible candidate to succeed David Cameron as party leader, alongside George Osborne and Boris Johnson.
She took on her political opponents in the Treasury and Foreign Office who want the UK to appear more welcoming to international students, and renewed her determination to limit student visas and clamp down on those who do not leave the country after the end of their degree.
"If they [students] have a graduate job, that is fine. If not, they must return home. So I don't care what the university lobbyists say: the rules must be enforced," she said. "Students, yes; overstayers, no . . . The universities must make this happen."
She was similarly trenchant against the idea of a common European policy on asylum, following the influx of thousands of Syrians and Iraqis seeking refuge from war. Instead Ms May's plan for asylum — put forward as a "new deal" — suggests limiting the number of people who she said "wrongly" claim asylum in order to be more generous to "the most vulnerable people in the world's most dangerous places".
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The overhauled strategy will involve reviewing the international legal definitions of asylum and refugee status to prevent applications from foreign criminals who are about to be sent home to prison.
"My message to the immigration campaigners and human rights lawyers is this: you can play your part in making this happen or you can try to frustrate it," she said. "But if you choose to frustrate it, you will have to live with the knowledge that you are depriving people in genuine need of the sanctuary our country can offer."
One of the biggest frustrations for the Home Office has been the inability to limit the large numbers of people coming to Britain from within Europe in search of jobs. According to the most recent statistics, 636,000 people moved to the UK while 307,000 left in the year to March. Of the arrivals, 269,000 were EU citizens.
Ms May stopped short of calling for Britain to leave Europe, but suggested that more should be done to limit freedom of movement around the bloc.
"At the moment, for example, workers coming to the UK on very low salaries can claim over £10,000 on top of their salary in benefits — which makes the UK a hugely attractive destination," she said. "This is not good for us, or for the countries those people are leaving."