The UK Border Agency has been accused of causing "chaos" in the student visa system - as a university stripped of its ability to sponsor international students announced they would challenge the ruling in the High Court.
MPs on the influential Public Accounts Committee said the UKBA's decision to introduce new requirements for student visas in 2009 without ensuring how they could be controlled was "poorly planned".
Speaking on Tuesday morning, Public Accounts committee chair Margaret Hodge said the UKBA needed to "get a grip".
The select committee's report follows controversy after London Metropolitan University's licence to bring in students from outside the EU was revoked.
UKBA said it had found more than a quarter of the university's international students were not legitimate. But London Met accused UKBA officers of "ignoring information that was made available to them when they conducted their audit".
The university's vice chancellor said on Tuesday morning more than 2,000 students were still facing the threat of deportation, saying the "report by the UKBA is wrong by so many details".
"We fundamentally contest their claim that there is systemic failure here," Professor Malcolm Gillies told the BBC Radio 4's Today programme.
"It's done huge damage to our university. But keep in mind it's doing a lot of damage to British Higher education."
Up to 2,600 foreign students could be forced to leave Britain as a result of the decision to remove London's Met Highly Trusted Status (HTS).
Last week immigration minister Damian Green suggested London Met was stripped of its powers to authorise visas because a "significant proportion" did not have a good standard of English and do not turn up to lectures.
But students affected by the decision said the decision reflected badly on Britain. Syed Rumman, Vice-President education officer and former law student at London Met told The Huffington Post UK "the whole world is watching and they will learn Britain isn't the place to come for an education."