University and student leaders joined forces to denounce as "damaging and dangerous" the planned overhaul of the student-visa system, which they said was based on "flawed data".
Figures from across the sector criticised government plans to tighten student entry requirements as a consultation on the policy closed this week. The plans include raising the minimum level of English competency to "B2" - equivalent to a high A-level pass - and restricting the rights of students' dependants.
The language requirement is expected to damage recruitment to university foundation courses, which prepare foreign students for higher education in the UK by improving their language and other study skills. Up to 80 per cent of those currently studying foundation courses did not have B2-level English upon entry, and about half of all overseas students at UK universities are recruited through that route.
Tony Millns, chief executive of the language teaching association English UK, said the changes would be "highly damaging".
"International fees subsidise home student places. They keep courses and departments open," he said.
Nicola Dandridge, chief executive of Universities UK, said she did not accept the "flawed data" on which the consultation was based.
"International students are not economic migrants. They come, they go and they bring money into the UK. There is no basis on which these proposals stack up."
Ms Dandridge said that universities were committed to working with the coalition to stop abuses of the visa system, but such cases made up just 2 per cent of the market. Meanwhile, foreign students were worth £5 billion a year to the UK economy and contributed 9 per cent of the academy's income.
"Higher education is a hugely significant export industry," she said. "This is a dangerous message to be giving out."
Edward Acton, vice-chancellor of the University of East Anglia, said that backbench MPs did not appear to understand the implications of the legislation, thinking it a simple measure to shut down "bogus colleges".
The critics claimed the policy also put the UK's research standing at risk, as foreign PhD students may be prevented from bringing dependants with them. If dependants do follow, they may be prevented from working or even volunteering, leaving them "virtually trapped in the home", according to Dominic Scott, chief executive of the UK Council for International Student Affairs.
He said the state consultation had received more than 25,000 responses, many of those from overseas students who felt "betrayed" as they may be unable to continue their UK studies. "We will lose students. I think we will lose trust, income and reputation, and business links around the world," he added.
Aaron Porter, president of the National Union of Students, said shutting out overseas applicants would cause widespread damage: "It won't just be international students who would lose out, it would lead to a worsening of the experience for all students."