Amber Rudd denied that she was racist after calling for companies to list their foreign workers

“Catastrophic” anti-immigrant rhetoric from the home secretary is damaging Britain’s reputation abroad and souring relations with European countries before Brexit negotiations, senior government figures have told The Times.

European diplomats are understood to have expressed deep anger over proposals last month by Amber Rudd to force companies to disclose how many foreign workers they employ.

While the plan was dropped within days, sources said that it had done “lasting damage” to the UK’s reputation. It is being linked in other European capitals with the rise in hate crime against EU nationals in Britain after the June 23 referendum vote.

Last week Angela Merkel, the German chancellor, raised the issue without prompting at a private meeting of European business leaders. One executive said that for