NZ First leader Winston Peters says the Government must investigate a company contracted by Immigration New Zealand in China to process visa applications after hundreds of fraudulent student visas were issued.



The fraud was picked up last month during routine checks on student visas processed through Immigration's Beijing office which revealed falsified bank statements and qualifications had been used to support applications since July last year.



A subsequent wider investigation found 279 visa applications had relied on fraudulent evidence and 231 of those students involved are still in New Zealand. All are students at private English language institutions in Auckland.



Peters has called for an urgent investigation into the Beijing branch of VFS Global Services.



"This is exactly the kind of problem created when you hand over a vital stage of border security to officials from foreign countries."



Taxpayers would have to pay for identifying and deporting "those who cheated to get into our country", he said.



"The continuing bungling by the Immigration Service is inexcusable in a first world nation."



Immigration staff were being investigated for possible links to the visa fraud and officials are trying to track down the students involved. By yesterday 10 students had been interviewed.



A review will also look at whether Chinese nationals working for Immigration were involved.



Tertiary Education Minister Steven Joyce said yesterday two independent Chinese immigration agents were linked to all the cases and it was possible they were working together.



It is not believed they targeted other countries.



Acting Immigration Minister Kate Wilkinson said there were about 25,000 student visa applications from China a year and she was not aware of a previous scandal on this scale.



Some of the students may be deported but others could be entitled to stay, she said. It was possible the students and schools involved were unaware of the fraud.



"Natural justice says that they're all entitled to give their side of the story."



Most of the private institutions involved had only a couple of affected students but at least one had up to 30.



Immigration head Steve Stuart said it was likely to take several weeks to contact all the students.



"It's important to note that, as opposed to anyone who departs voluntarily, anyone who is deported is unable to return to New Zealand for five years."



Anyone unsure about their visa should contact the department, he said.



* WHO IS INVOLVED?



279 applications fraudulently made through Immigration New Zealand's Beijing office



231 people fraudulently in New Zealand



60 of them have overstayed their visas



48 others have left or not yet arrived in New Zealand



20 English language private institutions in Auckland where the students are studying



2 Chinese immigration agents in Beijing believed involved