Immigration minister Damian Green said London Metropolitan University was "very, very deficient" sponsor because more than a quarter of students sampled were studying there when they did not have permission to stay in the country.
A "significant proportion" of students did not have a good standard of English and there was no proof that half of those sampled were turning up to lectures, he added.
"Any one of those breaches would be serious. We found all three of those breaches at London Metropolitan.
"I'm not chucking anyone out, we have actually set up a task force to make sure genuine students can stay in the country" he said.