Graeme Reid, head of research funding at BIS, told the Westminster Higher Education Forum conference, The Next Steps for UK Research and Innovation, that the UK's future prosperity and ability to solve "big challenges" depended on its success in an ever-intensifying global competition for top research talent.
The government has said it will reduce net migration into the UK to the "tens of thousands", as set out in a Conservative general election manifesto commitment.
But media reports have suggested there is tension between Home Office ministers intent on reaching the target and their BIS counterparts, who are worried about the policy's impact on business and universities.
The Home Office has made minor concessions, recently announcing that up to 1,000 non-European Union graduates with "world-class innovative ideas" and £50,000 to invest in a business will be allowed to remain in the UK.
Responding to a question about immigration rules, Dr Reid said that while "recent changes" addressed a good deal of the concerns, he was not sure they were "the end of the solution".
Maintaining the "right flow" of people into and out of the UK research base was vital to building international collaborations and "anything that inhibits the future internationalisation of research is a threat", he added.
Dr Reid said research and innovation was "taking on a different role within the national context" and was "more important now than it has ever been in our lifetime". This was why, "in the wider context of public spending, the government is demonstrating an exceptional commitment to science spending".
But Dr Reid said that many other countries felt similarly, noting that heads of state had begun mentioning research and innovation in their keynote speeches. He added that immigration policy was only part of the solution: maintaining the research excellence and production of highly skilled staff that attracted inward investment was also vital.
The latter, he said, was "part of the role of universities in a modern nation", although there was "more to do" on understanding how best to approach it.
Dr Reid also defended the aspiration of David Willetts, the universities and science minister, for more UK institutions to enter the global top 100: "To have more [of them] viewed globally as being in the premier league...matters when it comes to the career choices the best researchers make and the [investments]...global companies make."
He also dismissed as simplistic concerns about figures that show that UK companies do not spend as much on research and development as many of their international competitors.
He said: "There is a more subtle relationship between business and innovation than you ever get by counting white coats or R&D spending."