Immigration Minister Chris Evans told an audience at the Australian National University that Australia's skilled migration program would change from a supply-driven to a demand-driven model. The current occupations-in-demand list would be scrapped immediately and lesser-skilled occupations that were no longer in high demand would be replaced with higher-skilled ones such as engineers and mining and health-care workers. About 20,000 applications for offshore migration received since September 2007 would also be immediately withdrawn.

''Currently what we've got is a system where people choose to come in, whether they're going to get a good job or be able to operate in their skill or not. So this is designed to make sure that we get the right people to meet the economy's needs, not have people, if you like, self-selecting,'' Mr Evans said.

Honorary president of the Australian Federation of International Students Wesu Chau said the announcement had created uncertainty for thousands of students currently studying and hoping to gain permanent residency.

''It may take out the link between education and residency, but students who are already here will be furiously trying to get employers to sponsor them, and depending on the employer there may be employers who will exploit them,'' Ms Chau said.

Federation of Indian Students of Australia spokesman Gautam Gupta said governments had every right to change their immigration laws, but making the changes retrospective had left thousands of trainees and students in limbo.

''This is not the first time this has happened in Australia, and it's just unethical. It's like suddenly saying to all the permanent residents, 'Sorry, you have to go now','' Mr Gupta said.

For more on this story, see today's Canberra Times.