British businessmen and economists denounced the decision, which will force out more than 16,000 of Kenya's 25,352 working expatriates, along with their families.
Between 30,000 and 50,000 Britons live in Kenya, more than half of whom are thought to be British Asians, prompting comparisons with Idi Amin's expulsion of Asians from Uganda in 1972.
"This is a racist and economically suicidal move by the government," one British businessman said. "What is the difference between this and what Idi Amin did or what Robert Mugabe is doing?"
Aware of the damaging publicity a mass exodus would cause, the government said the expulsion would be implemented over the next two years.
"It will not be a blanket removal," said Ali Mwakwere, the labour minister. "The process has already begun, but we are honouring existing work permits until they expire."
Mr Mwakwere said he would target skilled and semi-skilled foreigners in the manufacturing industry, many of whom are Asians from Britain and the Indian sub-continent.
Asian-dominated commerce is also in the sights of the minister, whose ruling will be welcomed by poor, nationalist Kenyans. "Quite possibly British Asians and Asians in general are the target," a British High Commission official said. "We are watching the situation closely."
Non-Asian Britons are likely to be forced out too, as Mr Mwakwere said the clearout would sweep through the hospitality and tourism sectors.***
But now a very different African leader's influence threatens to shatter the dream of a racially-tolerant country with increasing numbers of white farmers being murdered by impoverished blacks inspired by Zimbabwean President Robert Mugabe's policy of taking away their land by force.
In South Africa, more than 1,500 white farmers have been killed since 1994, compared to 14 murdered by Mugabe's supporters in three years of violence in neighbouring Zimbabwe.
Most have died during robberies, but, according to a devastating report commissioned by South African President Thabo Mbeki's government, they are increasingly being killed by farm workers who want land of their own.
In Pretoria on November 4, a cross-section of that country's top security officers, academics and lawyers will meet to discuss what is seen as a serious threat to national security and the future of organised agriculture in South Africa.
They plan to tell the deeply worried Mbeki that he must take immediate action to meet the aspirations of millions of landless black South Africans.
A decade after the African National Congress (ANC) came to power promising blacks an end to white political and economic rule, some 40,000 whites dominate almost all aspects of food production. Mbeki recently condemned what he called the "two societies" that still exist in post-apartheid South Africa.
But black activists like Supho Makhombothi, of the Mpoumalanga Labour Tenants' Association (MLTA) which represents landless farm labourers in the impoverished Piet Retief and Wakkerstroom districts, are tired of rhetoric.
"We have waited long enough. Nothing has happened despite all the promises made by the African National Congress (ANC) about returning the land to us," he said.
"We are still living in slavery. We have therefore given the government an ultimatum to give us land or we will simply follow the example of our brothers in Zimbabwe and invade."***