Under a draft plan leaked to the 'Guardian' newspaper, British companies would have to recruit locally unless they can prove an "economic need" to employ EU citizens.
Some of the other tough measure in an 81-page blueprint for Britain's future immigration system includeforcing all but the most highly skilled workers to leave the UK after two years.
In a complete turnaround from the current freedom of movement rules as a member of the EU, Britain also wants Europeans without a job to be blocked from staying for more than a few months after March 2019, when it is set to officially exit the economic bloc.
In the latest set of revelations, it is clear it intends to exercise similar blocks on Europeans following Brexit.
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"We are already able to exercise controls in relation to those who come to this country from outside countries within the EU and we continue to believe as a government that it's important to have net migration at sustainable levels," British Prime Minister Theresa May said in the House of Commons when confronted over the issue as the UK Parliament re-opened after its summer recess.
Her comments were seen as a defence of the leaked Home Office draft, which has been widely criticised by British businesses as well as causing ripples among EU chiefs in Brussels.
Chai Patel, an Indian-origin legal and policy director of the Joint Council for the Welfare of Immigrants, said the leak suggests the UK government planned to "extend its current poor and unfair treatment of non-EU immigrants to European citizens post-Brexit".
"If these proposals are implemented it could be catastrophic for the UK hospitality industry and for those who enjoy the hospitality it brings," the British Hospitality Association said.
Meanwhile, Brussels indicated that such a tough stance on immigration could have repercussions on the ongoing Brexit negotiations.
According to reports, they are likely to block a transition deal and impose limits to single market access if the UK presses ahead with the leaked immigration proposals.
EU citizens coming as tourists, on short-term business trips or visits to friends and family would be able to enter the UK without needing permission, under the draft proposals.
However, those staying longer would need to register for a residence permit by showing proof of employment, study or self-sufficiency.