The Government should have considered other options before stripping a university 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 for sponsoring international students.
The move, which critics said sent a damaging message that the UK deports foreign students to all corners of the globe, comes after more than a quarter of students sampled 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UK, said there were other ways to address UK Border Agency concerns and the university's licence should only have been revoked as a last resort.
"The UKBA's decision to revoke London Metropolitan University's licence will cause anxiety and distress to those many legitimate international students currently studying at London Metropolitan, and their families," he said.
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The terror attack carried out by Khalid Masood at Westminster that left four people dead lasted less than two minutes say police.
Two knives were found at the scene in Islington, North London, and the suspects fled on foot before being arrested.