Calls to crackdown on bogus foreign students have driven large numbers of genuine overseas applicants to competitor countries, damaging not only universities but also the UK economy, a university chief has warned.
Chief executive of Universities UK, Nicola Dandridge, said repeated statements by ministers to be tougher on immigration had made international students feel unwelcome.
She said universities are reporting a significant drop in the number of students applying from overseas, particularly from India, Pakistan, China and Saudi Arabia,
"These are countries that send large numbers and also they are important countries in terms of international engagement, so we want to be promoting and fostering relations with them, not erecting barriers," she told The Guardian.
Any fall in foreign applicants will impact not only universities but also on the economy and international relations, she warned.
"They bring connections that reap dividends in financial and cultural and social terms way into the future," she said.
"We are concerned about the language and the atmosphere being created, not least because it plays very, very badly internationally.
"Whatever the intentions of the politicians are ... every time these sorts of comments are made by the Home Secretary or others it does have a potentially very damaging impact internationally."
In November, Boris Johnson issued a warning over prejudice against foreign students in the UK, saying new visa rules introduced by ministers sent out the "wrong signal".
Following the London Mayor's visit to India, a private Indian university announced its plans to open a campus in London for 15,000 foreign students.
Overseas students are estimated to be worth £8bn a year to the British economy, a figure projected to rise to £16.8bn by 2025, according to a study by the Department for Business, Innovation and Skills.
She said the government's success in closing down bogus colleges and cutting student visa numbers by 74,000 (26%) last year as part of a drive to reduce overall net migration but insisted that there was no cap on legitimate students from outside the EU.
Dandridge said politicians need to portray the UK as being open and welcoming to international students without compromising immigration laws.
Mark Harper, the immigration minister, added: "The UK's education system is one of the best in the world but to maintain this reputation it is vital that we tackle the abuse of the student route, while making sure Britain remains open for business."