British universities could stand to lose out on millions of pounds annually if immigration policies are not changed, it was claimed today.
Professor Eric Thomas, president of Universities UK and vice-chancellor of the University of Bristol, said a number of recent visa changes could have the effect of deterring foreign students.
Universities UK fears there could be clampdown on the number of international students in order to achieve net migration of less than 100,000 and is writing to the Prime Minister, urging him to class them as temporary, rather than permanent, migrants.
Not doing so could risk losing the UK's favoured status among overseas students, Prof Thomas warned.
His comments come after think tank the IPPR warned the government it was putting short-term political aims above concerns over long-term migration with its plans to cut the number of international students coming to the UK.
"The UK seems to be telling the world it doesn't welcome international students, while other countries are travelling in different directions," said Prof Thomas.
He added: "We are requesting that international university students should be removed from the net migration statistics for policy purposes, bringing us in line with our major competitors.
"We believe that this would help the Government by creating a clear differentiation between temporary and permanent migration, help universities whose international character is essential to their future success, and help the UK by contributing to economic growth."
International students currently contribute £5 billion a year to the UK economy, a figure that rises to £8 billion when EU students are included.
There is the potential for that to increase to £17 billion by 2025 and "create thousands of jobs", Prof Thomas suggested.
If universities face a decrease in overseas admissions, they could each lose "£5 million or £7 million" a year, he added.
Attracting overseas students is "exactly the type of activity the Government should be supporting in these difficult economic times", Prof Thomas said.
He added: "There are significant economic benefits and growth in this area and we believe removing international students from net migration figures, which is what other countries are doing, will send very positive signals around the globe."
Recent changes include the fact that international students can no longer bring their dependants with them, unless they are taking a postgraduate course which is at least 12 months long, and there is a "more selective" system in place for students wanting to stay in the UK to work after completing their studies.
Prof Thomas said: "The opportunity of post-study work is a valuable incentive to prospective students to choose to study in the UK.
"We must ensure that these changes do not put the UK at a competitive disadvantage."
Demand for places at UK universities from overseas students, particularly for courses in management, economics and finance, remains high - but Britain could be passed over for other countries' institutions if they do more to attract students, Prof Thomas said.
He added: "I don't think it's going to be easy to persuade the Home Office about this, but there are those in the Government who would support this happening, and those who are against it.
"Just because it isn't going to be easy, doesn't mean we shouldn't try to do it."