Britain's reputation as home to one of the world's thriving higher education sectors is under threat after a university was stripped of its right to admit foreigners, critics have said.
More than 2,000 students could face ejection from the country after the Government revoked London Metropolitan University's highly-trusted status (HTS) for sponsoring international students.
But critics said the move sent a damaging message to all corners of the globe that the UK deports foreign students.
It came after more than a quarter of a sample of students studying at the university did not even have permission to stay in the country.
Professor Eric Thomas, president of Universities UK, said there were other ways to address the UK Border Agency's concerns and the university's licence should only have been revoked as a last resort.
Sally Hunt, general secretary of the University and College Union, said: "No matter how this is dressed up, the damaging message that the UK deports foreign students studying at UK universities will reach all corners of the globe.
"The last thing we can afford to do is send a message that international students are no longer welcome here.
"Yet Government efforts to impress a domestic audience by sounding tough on immigration, coupled with the chaotic handling of this affair, risk doing exactly that."
The Association of Teachers and Lecturers (ATL) also blamed the Government's "obsession with students abusing immigration regulations", saying the decision could make it harder for the UK to attract the most talented teachers, doctors, scientists and engineers.
Martin Freedman, ATL's head of pay, conditions and pensions, said: "Overseas students will quite reasonably wonder whether the Government is going to prevent other universities from educating them, which could hit UK universities hard.
"This decision may damage the UK's reputation as one of the world's thriving higher education sectors."
Labour also criticised the Government's handling of the row.
Efforts to tackle bogus colleges were undermined "when ministers brief against a university on Saturday, deny the status is being revoked on Sunday and proceed to revoke on Thursday", shadow immigration minister Chris Bryant said.
Keith Vaz, chairman of the Commons Home Affairs Select Committee, added: "The Government may well have the best intentions and valid reasons for revoking this licence, however the process must be much better in future.
"It has left thousands of students in limbo and I am afraid it may damage the reputation of this country as the best place in the world for overseas students."
Universities Minister David Willetts said a task force - led by the Higher Education Funding Council for England and Universities UK - would be formed to help overseas students affected by the decision.
"It is important that genuine students who are affected through no fault of their own are offered prompt advice and help," he said.
London Metropolitan University's HTS status was suspended last month while the UK Border Agency (UKBA) examined alleged failings.
Immigration Minister Damian Green said: "Allowing London Met to continue to sponsor and teach international students was not an option."
Of 101 sample cases, 26 students were studying between December last year and May despite the fact they held no leave to remain in the UK, UKBA figures showed.
A lack of required monitoring meant there was no proof students were turning up to lectures in 142 of 250 (57%) sampled records.
And 20 of 50 files checked since May for evidence of mandatory English language testing and academic qualifications showed poor assessment where documents were either not verified or not held.
"Any one of those breaches would be serious," he told BBC Radio 4's Today programme. "We found all three of those breaches at London Metropolitan.
"What we found here is a serious systemic failure where it appears that the university doesn't have the capacity to be a proper sponsor and to have confidence that the students coming have the right to be here in the first place."
Professor Malcolm Gillies, the university's vice chancellor, described the claims made against the institution as "not particularly cogent" and said it would be disputing them.
"I would go so far as to say that UKBA has been rewriting its own guidelines on this issue and this is something which should cause concern to all universities in the UK," he said.
The move could mean more than 2,000 students being deported within 60 days unless they find another sponsor, according to the National Union of Students (NUS).
The NUS contacted Prime Minister David Cameron and Home Secretary Theresa May to "express anger at the way decisions have been made in recent weeks and to reiterate the potentially catastrophic effects on higher education as a £12.5 billion per year export industry for the UK".
But the campaign group Migration Watch UK warned that "some inflated figures have been circulated about the economic value of foreign students".
"The Government are absolutely right to crack down on this," chairman Sir Andrew Green said.
"The financial interests of the universities cannot be allowed to destroy the Government's immigration objectives which are so widely supported by the public."
Edward Wanambwa, head of the immigration team at Russell-Cooke solicitors, added the university "faces the prospect of being sued for potentially tens of millions of pounds" unless the decision is overturned.
It could also have to repay "some or all" of the international students' fees, he added.
Foreign Secretary William Hague told the BBC: "We are a popular place to come and study, but people need to know that the quality is right, that real courses are there.
"I think the kind action of taken by the Home Office, by the UK Border Agency actually, is essential for us to maintain our reputation in the world for the education we offer, rather than being damaging to that reputation."
Nicola Dandridge, chief executive of Universities UK, told the BBC Radio 4 PM programme: "The first priority has to be try and accommodate (genuine students') need to study and continue their degree or postgraduate degrees.
"There is widespread concern among many international students that they themselves, even though they are studying at other universities, they are going to be affected in some way.
"It is really important they understand that what has happened today and yesterday is isolated and it only affects London Metropolitan.
"I find it an extraordinary decision (from UKBA), surprising and disproportionate. It is one thing, raising issues if they have them with London Met and, if appropriate, penalising the university. That may be appropriate or it may not be.
"But penalising legitimate international students is disproportionate and it is damaging to our international reputation."