The Home Office is facing over 300 court of appeal legal challenges from foreign students who believe they were wrongly accused of cheating in English tests, and dozens more cases are pending in immigration tribunals.

The Guardian has learned that a special team overseen by the Home Office was established in January 2017 to deal with the growing backlog of legal actions related to a Home Office decision in 2014 to revoke or curtail the visas of around 34,000 students whom they accused of cheating in a government-approved English language test.

The decision was made while Theresa May was home secretary as her department introduced policies designed to create a hostile environment for immigrants deemed to be in the country illegally. More than 1,000 students have been removed from the UK as a result and MPs have described this as Britain’s “forgotten immigration scandal”, which they say has the capacity to be “bigger than Windrush”.

Although there was evidence in a BBC Panorama documentary that some students did cheat, there is growing concern over the government’s subsequent ruling that the majority of people who sat the test of English for international communication (Toeic) between 2011 and 2014 had cheated.

Most students accused of fraudulently obtaining the language proficiency certificate required for a visa extension were unable to appeal, because of a parallel move by the Home Office to remove appeal rights and legal aid for most immigration cases. But many of those who have been able to pay for legal advice to challenge the allegation of cheating have found the evidence provided by the Home Office to be very insubstantial.

Bibi Rahima is one the students with an upcoming court of appeal hearing, listed for May. She said the Home Office’s actions had “shattered her dreams” and left her in “a state of despair”. Since being accused in 2016 of cheating in the Toeic test she took four years earlier, she has been unable to study or to work, and does not want to return to Bangladesh with her reputation tarnished by an allegation of fraud from the UK government.

The process of attempting to challenge the accusation has made her severely depressed; she was admitted to hospital last June, feeling suicidal. She and her husband have spent over £12,000 – all their life savings – on legal costs attempting to clear her name.

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Rahima, 28, arrived in the UK in 2009 to study chartered accountancy. She chose to come to Britain because of the country’s reputation for excellent universities. Her English was already good when she arrived, because she had studied in a private school in Bangladesh where many of the lessons were in English.

Her father, who owns his own business, paid for her initial tuition fees. Later she began working to help pay for her fees, and was a part-time manager in a Greggs store in central London. Her English is precise and clear, so she had no problem managing other members of staff.

A letter from the Home Office ruled unexpectedly in 2016 that her visa renewal application had been rejected, stating that she had “participated in an organised and serious attempt to defraud” the Home Office. The Home Office concluded that “her conduct, character, make it undesirable to allow her to remain in the UK.”

“I feel insulted and humiliated. I’ve worked, I’ve finished my studies, and then this comes up. It is inhuman. It has been almost three years – I can’t work, I can’t travel. I feel like my life is just a prison, everything has completely stopped,” she said.

The home secretary, Sajid Javid, has told the Labour MPs Stephen Timms and Wes Streeting that he is “sympathetic” to the situation that some of the students face; he is understood to have this issue at the top of his priority list, and hopes to make a decision on how to proceed in a few days.

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A ruling in December 2017 meant that students would be entitled to an appeal in the UK; previously most had been told that they needed to return to their own countries to appeal but for many this was not a realistic prospect. It is not known how many cases have already been settled; lawyers believe hundreds of students whose cases were initially dismissed could take advantage of this legal shift.

Sonali Naik QC, a barrister at Garden Court chambers who has handled over 30 Toeic cases, said: “The biggest tragedy is that this was all entirely avoidable; the whole reason that this has arisen is that the Home Office took away the right of appeal leaving ordinary students with no remedy. The impact on the individual is very acute. Many have been waiting for five years and in that period they can’t study or work, they can’t clear their names, their reputations are damaged, they can’t progress with their lives.”

Most of the cases she has dealt with have provisionally found in the students’ favour, and the government has been told it must pay for the cost of the legal action.

Patrick Lewis, another barrister with the same chambers, said he had fought about 15 Toeic cases, and had only lost one. Judges had “demonstrated a real willingness to believe the evidence” put forward by students, he said, and “real concern about the quality of the evidence relied on by the Home Office”.

Rahima is distraught at the impact on her life. “You can’t do this to people without proper evidence. You can’t just ruin people’s lives in this way. I’m just sitting at home doing nothing. It is so painful.” Her parents have such faith in the UK justice system that they have become suspicious of her inability to extract herself from the accusation of cheating.

Rahima met her husband, Kamrul Hasan, at college. “We have been asking them to provide proof that she has cheated. “They have sent generic evidence; they didn’t give any specific evidence that she has cheated,” he said. “If you say that a person is guilty then you have to prove that. We’ve worked, paid taxes, never claimed any social benefits. The Home Office does not see the effect it is causing people. She has really suffered.”

The Home Office said 25 people involved in organised Toeic fraud had received criminal convictions, adding: “The 2014 investigation into the abuse of English language testing revealed systemic cheating, which was indicative of significant organised fraud. The home secretary has listened to the points raised by MPs and other groups and has asked for further advice from the department.”