London Metropolitan University's future at stake as 2,500 students face deportation

Britain's reputation as a world-class centre for higher education faces irreparable damage, the Government was warned last night, as more than 2,500 foreign students fought desperately to avoid deportation after their visas were suddenly cancelled.

The students, who have been given 60 days to find alternative courses or be forcibly removed from the UK, were all enrolled at London Metropolitan University, which was dramatically stripped of its right to teach all non-European Union foreign students after the Border Agency said it was failing to comply with visa rules.

Stranded students said they were being treated unfairly after being given permission to come to the UK to study and paying tens of thousands of pounds in fees and costs for the chance to do so. The Government has moved to set up a task force of business and education bodies to identify genuine students and try to help them enroll elsewhere. But London Met may still face mass legal action from aggrieved students seeking refunds in the tens of millions of pounds, lawyers have warned.

Concerns were also raised that the Government's determination to crack down on immigration could impact on the finances of other universities reliant on the higher fees paid by foreign students to balance their books.

The vice-chancellor of London Met, Malcolm Gillies, warned that the future of the university, which has 30,000 students, is at stake, because the punishment for its immigration failures could blow a £30m hole in its budget.

Foreign students bring an estimated £12.5bn in to the UK economy every year. "No matter how this is dressed up, the damaging message that the UK deports foreign students at UK universities will reach all corners of the globe," said Sally Hunt, general secretary of the University and College Union. "The last thing we can afford to do is send the message that international students are no longer welcome."

UK Border Agency staff claimed one in four of London Met's overseas students (26 out of a sample of 101) did not have valid visas, 142 out of 250 had "attendance problems" and 20 out of 50 interviewed had limited English.

The university, which denied the claims, said it was "disappointed" with the "unnecessary action" with Professor Gillies adding: "We believe it is out of proportion even in terms of the evidence presented to us."

Fellow vice-chancellors united in condemnation of the UKBA. Professor Eric Thomas, chairman of Universities UK, which represents UK vice-chancellors, said: "The UK Border Agency's decision to revoke London Metropolitan University's licence [to teach overseas students] will cause anxiety and distress to those many legitimate international students studying at London Met and their families."

Professor Thomas, vice-chancellor of Bristol University, added: "We believe that there were alternative ways of addressing UKBA's concerns and that revocation of a university's licence should only be the option of last resort."

Liam Burns, president of the National Union of Students, said it had expressed "anger at the way in which decisions had been made" by the Home Secretary Theresa May and the Immigration minister Damian Green. He added that it would have a "potentially catasthrophic" impact.

Chris Bryant, Labour's immigration spokesman, said the decision would bring "lasting damage to the international reputation of the UK university system which brings billions into the UK economy every year".

Edward Wanambwa, a leading lawyer and head of immigration at Russell-Cooke solicitors, warned the university could be sued for "milions of pounds" as overseas students sought to recoup course fees they had already parted: "Unless the university can very quickly overturn the decision in the High Court, it faces the prospect of being sued for tens of millions of pounds – not to mention having to repay some or all of the fees paid by international students. It seems quite likely given the approach being taken that similar decisions will be threatened or taken against other institutions in the near future."

Teaching overseas: Students visa rules

Institutions which want to welcome students from outside the EU must first gain a licence from the UK Borders Agency, which must verify them as "Highly Trusted Sponsors". In 2011, the Home Secretary made the requirements more stringent and introduced a maximum number of students each could sponsor. Students can apply to these institutions to study English courses above a minimum standard as well as courses of degree standard and above on a "Tier Four" visa.

The rules state they can come to the UK for up to three years to study and can stay up to four months afterwards. Anyone who wants to stay longer must apply for a separate visa. UKBA guidance says a student is "allowed to spend no more than three years in the UK studying below UK Bachelors degree level in his/her lifetime".

"My family has spent £60,000 on my studies"

Phuntsok Tsering, 26, from India, studying architecture

"I have invested six years in this country. I did my undergraduate degree here and have come back to continue as a postgraduate. We were given a list of other schools that would take us: Westminster is the only good one and they've just told me it's full.

"My family has spent £60,000 on my studies. I am stressed out about it, and have not told them yet – they will come to know through the news. There are students who bend the rules but for us genuine students it is totally unfair. I have a year left to study and now I will just have to make do. [If not], they are not going to refund me for the time I have spent here. We blame the UK Borders Agency because, if they were sure, they could have told us six weeks ago. Most of the international students are not aware, they are on holiday still. It is only on the university's website, they didn't even email us."

"The UKBA has not made the right decision"

Camila Alvarez, 25, from Brazil, studying marketing

"This is humiliating for us. We are here legally and have gone through a strict procedure to get into Britain. We have been told that our visas are no longer valid and we only have 60 days to find another sponsor. Of course, we cannot blame the students directly but they are not supposed to be here. If the university is aware of the rules, it should be putting in place rigorous checks. The UKBA has not made the right decision."

"I'm worried about finding another place to study"

Babatunde Hamzat, 23, from Lagos in Nigeria, is studying for a business degree

"I have to look for another school. I am worried because it is difficult to find somewhere that is a good place to go if we are potentially illegal residents here. I still have three years to go until my course ends and I have only two months to find something. I have paid £6,200 already, I have to pay another £10,000 this month to guarantee a place: I don't even know where that will be yet."