Almost one in three of London Metropolitan University's full-time undergraduates taking modular courses did not complete their courses in 2005-06, Times Higher Education can reveal.
Of these, a significant proportion earned less than half the course credits that would normally be expected of them in a year.
The figures are key because London Met faces having to return overpayments of millions of pounds to the Higher Education Funding Council for England after under-reporting the number of non-completions for several years.
A member of staff at the university said the figures, obtained under the Freedom of Information Act, seem to put paid to the idea that London Met is suffering as a result of confusion over the definition of non-completing students, and that most of the non-completions it failed to report were marginal cases.
Of the 11,263 full-time undergraduates on modular courses at London Met in 2005-06, 3,388 quit before completing. While a full-time student would normally be expected to gain 120 credits in a year, 1,483 students completed less than half that amount, and 803 earned fewer than 30 credits, which equates to just two modules.
In addition, 1,099 part-time undergraduates - a quarter of the total number at London Met - failed to complete a single 15-credit module.
Hefce plans to claw back a sum forecast to be more than £36 million paid to the university between 2005 and 2008 and has cut London Met's grant for 2008-09 by £15 million.
Hefce's FoI officer said: "Our audit work examined 2005-06 data ... it is that year in particular that has resulted in the subsequent funding adjustments for the period 2005-06 to 2007-08, and ... for future years."
Several universities have had to return money to Hefce after misinterpreting its rules governing which students count as non-completions and do not qualify for funding. However, the scale of the clawback at London Met is unprecedented.
The degree of discrepancy between Hefce's figures and London Met's data returns is the subject of a further FoI request.
The member of staff at London Met, who asked not to be named, said: "The university's case against Hefce relied implicitly on the illustration of non-complete students completing most of their modules and still not receiving funding. These figures suggest that this was not the case. Most of (those) students were not serious students."
Of the 2005-06 non-completing full-time students, only 555 completed more than 105 credits.
A London Met spokeswoman said: "Non-completing students, in accordance with the Hefce definition, are those who do not take the final assessment for all the modules for which they are registered in the year of study ... The figures show that the majority (1,805) of 'non-completing' (modular) students accumulated more than half of the required credits.
"We're surprised that a member of our own staff should claim that our students were not serious."
But Barry Jones, assistant general secretary for London North at the University and College Union, said the figures were "inconsistent with the messages coming from the management of London Met".
He said: "UCU appears to have been misled. Since management has so far failed publicly to acknowledge its responsibility for this situation, we believe that an independent inquiry would be appropriate."
A ballot on industrial action by the university's UCU branch closed on 29 April.
Story update, 30 April:
Lecturers at London Metropolitan University have voted in favour of strike action and “action short of a strike”, the University and College Union has announced.
The UCU said members had voted “overwhelmingly” for action in response to the threat to 550 jobs, which it said would put a quarter of the workforce at risk.
The threatened cuts are a result of the claw back of funding faced by London Met following its inaccurate reporting of student completion rates.
Of those who took part in the UCU ballot, 64 percent voted for strike action and 71 percent for action short of a strike.