The net flow of migrants into the UK over a 10-year period was underestimated by nearly 350,000, the Office for National Statistics says. It says the International Passenger Survey, which provided initial estimates, missed a "substantial" number of those migrants from eight countries that joined the EU in 2004.
This underestimate went on until 2008, an ONS review found.
Net migration from 2001-2011 is said to be 346,000 higher than was thought.
The ONS review looked into the quality of migration estimates, based largely on the International Passenger Survey (IPS) - a system designed to collect information about passengers entering and leaving the UK.
It found some citizens coming into the UK from the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia had not been counted.
'Important evidence' Continue reading the main storyWe have known for some time that net migration must have been much higher during the 2001 to 2011 period than the official estimates had suggested”End Quote Carlos Vargas-Silva The University of Oxford This was partly due to the fact IPS interviews focused on major airports such as Heathrow and Gatwick instead of the regional hubs which were increasingly being used by migrants, the ONS said.
This meant that regional airports in the UK were either not covered at all - or not fully covered - by the IPS.
Improvements were later made to the IPS and from 2008, more regional airports were included in the surveys and more interviews were conducted at major regional airports such as Luton and Stansted.
Net migration is the number of people moving to the UK minus the number of those leaving.
Migration Watch chairman Sir Andrew Green said: "This is final confirmation that net foreign immigration under Labour totalled nearly four million, two-thirds from outside the European Union.
"It also shows that the peak of net migration was almost 275,000 a year, making it even more difficult for the present government to get the numbers down to the tens of thousands."
Carlos Vargas-Silva, senior researcher at the Migration Observatory at the University of Oxford, said: "We have known for some time that net migration must have been much higher during the 2001-2011 period than the official estimates had suggested.
"This report provides important evidence of the need for better migration data and of the limitations of using a survey to develop net migration data."
The IPS estimates of children aged under 15 who are entering the UK are also too low, the ONS review found.