With an intake drawn from more than 150 countries at last count, London’s Metropolitan University has long been a magnet for overseas students attracted not only by the world-class reputation of Britain’s higher-education system but the prospect of going to school in one of the world’s most multicultural cities.

Yet this week, the school was forced to launch a legal action that goes to its very survival, following a decision by authorities to strip the 164-year-old institution of the right to admit students from outside the European Union.

Thousands of students now face deportation after the UK Border Agency (UKBA) found that more than a quarter of a sample of students studying at the university did not even have permission to stay in the country. Meanwhile, Metropolitan University, which enrolls 30,000 young people, including some of the UK’s poorest, has vowed to defend its reputation.

Amid street protests by distraught students, as well as claims and counterclaims that the university has been, variously, badly run or the victim of a confused regulatory framework, the controversy has led to tensions between a university sector eager to preserve the lucrative overseas student industry and a shift by the British government towards a more hard-line approach to immigration.

“In terms of immigration policy, two trends are currently working together – a drive to reduce the overall numerical level of net migration and within that, a particular focus on enforcement of immigration law,“ says Scott Blinder, whose research at Oxford University’s Migration Observatory focuses on public opinion toward migration and its impacts on elections and policy.

Research by the Observatory last year suggested a recognition among the British public of the legitimacy and value of overseas students, whose numbers make up the bulk of migrants in the UK. When asked what groups came to mind when thinking about a "typical" immigrant, less than 30 percent of those polled checked "students" – as opposed to asylum seekers and others.

“So people are not so concerned about student immigration – but they are concerned about so-called illegal immigration and the overstaying of visas. This case falls in the middle of those two aspects of public sentiment,” adds Dr. Blinder.

Until recently, government moves to clamp down on the manipulation and abuse of student visas have focused on sectors such as English language schools and private institutions, while care has been taken not to risk damage to the university sector.

Overseas students are worth £5 billion (about $8 billion) per year to the UK, and the industry could be worth £16.9 billion (about $27 billion) by 2025, according to Universities UK, the organization representing the university sector.

Damian Green, immigration minister until this week, said last week that checks had revealed a "significant proportion" of students at the Metropolitan University did not have good English and there was no proof half the students were attending lectures.

Launching a legal action Tuesday against the UKBA’s ruling, the university contended that there was "no evidence of systemic failings" and accused immigration inspectors of ignoring information provided during their audit.

Earlier this week, an influential all-party parliamentary committee scrutinizing state expenditures condemned the UKBA for passing responsibility for student visas to universities before implementing proper controls. The committee said the number of migrants who took advantage of gaps in the system could have been as high as 50,000.

Meanwhile, hundreds of legitimate students have been searching for new university sponsors before their existing permissions to study in Britain expire.

Syed Rumman, a Bangladeshi overseas student and vice-president for education for London Met's student union, said that students’ lives were being “binned.”

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“The UK is popular with students from abroad, especially countries with historical cultural ties to Britain, because the standards of education are world class and of course London is a thriving, multicultural city.

“But if I was involved I the British government," he continues, "I would be very worried about the future because many students at the moment are advising their friends and families to rule out coming to study here.”