A record 157,000 overseas students took up places in British universities and colleges last year.
The Home Office said yesterday that international students boosted the economy by almost £8.5bn a year.
More than 25 per cent of immigrants to Britain are students, compared with 20 per cent five years ago. The influx follows concerted efforts by many higher education institutions to market their wares abroad and boost their income.
Fierce competition has developed between vice-chancellors to sell places on their courses to foreigners. The battle rages as UK universities prove increasingly popular, with demand being driven by strong performances in international league tables and a growing number of English speakers around the world.
The number of foreign students has doubled since 1998, when 77,000 arrived. Last year's total was an 18,000 increase on 2005.
Each foreign student is estimated to be worth more than £15,000 to the UK in fees and living expenses. But there are fears that the income stream may slow as new rules on student visas come into force next year.
China is by far the largest source of foreign students studying at British universities, with more than 52,000 people coming to study in the UK in 2005-06. Indian students make up the second-largest group with nearly 16,000 students, ahead of the US, with 14,000.
Business and administration was the most popular subject among students from abroad, followed by engineering and technology.
University College London was the largest recruiter of overseas students, with nearly 27,000 on its books, but the London School of Economics topped the list of universities dominated by overseas undergraduates and postgraduates, with 64 per cent coming from overseas.
A spokesman for Universities UK hailed the rising number of students and academics choosing to work and study in Britain. He said: "International students and academics also provide an immeasurable academic, cultural, and social benefit to the UK generally.
"It is therefore vital for our universities and the economy that the UK continues to offer a truly welcoming and supportive environment for international students and academics."
By contrast, 19,000 people left Britain last year to study overseas, a number that has stayed broadly similar for a decade.Reuse content