The Government is to urge British universities and colleges to consider turning away thousands of European students on exchange programmes.
It wants them to drive harder bargains with partner institutions on the continent to strike a better balance between the import and export of students.
Department for Education and Employment officials are concerned that the imbalance has nearly doubled over the past six years to make Britain a net importer of 45,000 European Union students, costing about Pounds 100 million a year.
The import-export gap has been widening faster over the past two years as fewer student from the United Kingdom apply to study in another EU country.
The DFEE is now seeking talks with the Committee of Vice-Chancellors and Principals and the Standing Conference of Principals to see what can be done.
Tony Clark, the DFEE's higher education director, told a House of Lords inquiry into student mobility that the imbalance was so large that Britain was providing the equivalent of four universities to accommodate other EU students.
He said: "I do think that universities need to act in a more dirigiste way. They set up contracts with universities in Europe. Through that contract it ought to be possible for them to set figures that provide a closer balance.
"It may be that as part of this they will need to constrain rather more than they have in the past the number of incoming students."
Mr Clark said he was more optimistic about redressing the balance in the Erasmus exchange programme than in the student mobility market overall.
Latest figures show an 8 per cent fall in the number of UK students studying on the continent, leaving Britain importing twice as many Erasmus students as it exports.
The government announced last week that it had decided to waive tuition fees for the year Erasmus students spend in another EU country in an effort to check this trend. But it ought to be possible for Erasmus to regulate numbers coming to the UK, possibly redirecting them, Mr Clark said.
"In terms of reaching a balance I do not think that is necessarily a bad thing," he said.
Mr Clark's suggestion met with a mixed response from university international office heads this week. James Lusty, pro vice-chancellors responsible for international affairs at the University of Central Lancashire, which has the biggest number of students from other EU countries, said: "It would be better if the government were to do more to encourage our students to study on the continent. Restricting incoming students could cost us more overall."
Roger Blows, the CVCP's international policy adviser, said the government would have to be careful not to fall foul of European mobility laws.
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