The Government will today pave the way for a climbdown over Theresa May’s controversial policy of counting foreign students as migrants in official immigration statistics.

Amber Rudd, the Home Secretary, will ask her independent advisers on immigration to review the costs and benefits of overseas students.

The move follows warnings by universities that classing the students as long-term migrants is deterring young people from coming to Britain to study and damaging its successful higher education sector.

Ms May appears increasingly isolated on the issue. As Home Secretary, she launched a crackdown which banned more than 900 mainly bogus or low-quality colleges from bringing in foreign students, according to the Home Office.

But there is growing evidence that ministers have exaggerated the number who overstay their visas as they justified curbs on overseas students.

Last month the Office for Statistics Regulation watchdog said official figures suggesting about 100,000 stay illegally in the UK each year after their courses end are “potentially misleading” and should be downgraded to an “experimental” number. It is based on a survey of students leaving the country at ports and airports.

The Government’s critics claim the true figure for overstayers is just 1,500 a year.

The Independent and Open Britain, which urges a soft Brexit, are running a Drop the Target campaign against the “tens of thousands” goal and calling for overseas students to be omitted from the statistics.

Cabinet ministers including Philip Hammond, Boris Johnson and Liam Fox and Ruth Davidson, the Scottish Tory leader, have called for students to be taken out of the migration statistics.

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The new study will be seen as another example of the Cabinet flexing its muscles after Ms May’s failure to win an overall majority at the June election.

One senior member of the Government who backs lifting students out of the figures said: “It’s a really positive step forward – a good sign.

"There has been data recently from the Office for National Statistics (ONS) showing the large economic contribution that students make.

"So this is a now a move towards the Government establishing an agreed fact-base, so we can form policy that is most appropriate and suitable to our needs.”

A Tory MP pressing for the reform said: “This looks like a way of getting the PM off the hook. She likes evidence-based policy, and the review will hopefully provide the evidence.”

Ironically, removing students from the figures would help Ms May hit her target to bring net migration below 100,000 a year. It currently stands at 248,000, including about 73,000 foreign students.

The latest quarterly figures will be published today – along with the first data from exit checks introduced in 2015 to track the departure of more than 100 million air, rail and ferry travellers.

The Migration Advisory Committee will report on EU and non-EU students by September next year. Its study will include the impact of tuition fees and other spending on the national, regional, and local economy and the education sector; the role foreign students play in contributing to local economic growth and their impact on the provision and quality of education provided to UK students.

The ONS has admitted that overseas students paid £4.5bn in tuition fees in the 2015-16 academic year, almost double the £2.4bn previously estimated.

Ms Rudd said: “There is no limit to the number of genuine international students who can come to the UK to study and the fact that we remain the second most popular global destination for those seeking higher education is something to be proud of.

"We understand how important students from around the world are to our higher education sector, which is a key export for our country, and that’s why we want to have a robust and independent evidence base of their value and the impact they have.”

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Brandon Lewis, the Immigration Minister, said: “We have always been clear that our commitment to reducing net migration to sustainable levels does not detract from our determination to attract international students from around the world. Since 2010 we have clamped down on abuse, while increasing the number of genuine students that come to the UK.”

The Home Office insisted the UK is the second most popular destination for foreign students, with four UK universities in the world’s top 10; 16 in the top 100 and satisfaction among foreign undergraduates at 91 per cent.

Last year saw an increase of 6 per cent in visa applications for Russell Group universities, while visa applications sponsored by universities are 17 per cent higher than they were in 2010.

Alistair Jarvis, chief executive of Universities UK, said: "We welcome the Government's commitment to a detailed examination of the net benefits of international students. This is an opportunity to build on the considerable evidence that shows that international students have a very positive impact on the UK economy and local communities."

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