British universities fear that tighter visa rules for Indian students could hit their revenues as these students are among the highest-paying.

Not only would the British Universities loose huge fees, but they fear that these students could turn to other international varsities.

Universities in the U.S. and Australia are the top destinations for Indian students and the UK had recently started catching up.

According to official figures, the direct value of students from India and other non-European Union countries to the U.K. economy is estimated at 8.5 billion pounds annually.

Home secretary Alan Johnson announced a tighter student visa regime this week, days after Britain suspended issuing student visas in north India, Nepal and Bangladesh, suspecting large scale irregularities.

The new rules, which include a higher bar for English language skills, come into effect from March third.

Students from India and elsewhere pay at least three times more fees than British and European Union students.

However, the new rules have led to much concern in universities that derive a substantial percentage of their income from international students.

The new rules have been put in place amidst major funding cuts announced recently for British universities.

Universities U.K., the umbrella body representing all British universities, said it supported moves to prevent abuse of student visas but expressed concern about the potentially significant impact on the provision of English language programmes by universities and other providers.

Nicola Dandridge, chief executive of Universities UK, said: “(The) UK derives significant academic, cultural and financial benefits from international students. In a highly competitive market for students we must ensure we remain a welcoming and attractive destination“.

She added: “We are concerned about the proposals to restrict English language study as the UK is a major destination for students wishing to learn English before studying for a degree and there is a real risk that restrictions on reputable education institutions will make the UK less attractive to international students.”

Latest official statistics show that in 2007/08, there were 341,790 non-U.K. students in higher education in the U.K.

International students form 14 per cent of the full-time student population in the UK and 43 per cent at research postgraduate level.

Around 11 per cent of academic staff in British universities are non—EU nationals while thousands of international academic visitors come to the UK every year.

Virginia West, director of Wales International Consortium, an umbrella body that promotes Welsh universities abroad, said: “Our universities depend on international staff and students in all their activities, as do universities everywhere — research, teaching, quality, the student experience and graduate employability etc. are all measured internationally today.

She added: “The difficulty for us now is that sudden unplanned changes by the Border Agency to the system could affect years of hard work building brand, reputation, partnerships and recruitment internationally“.

A spokeswoman for the University of Wales Institute, Cardiff (UWIC), which currently has students from 125 countries, said: “We are proud of our reputation for recruiting students from all over the world, consistently being ranked as one of the UK’s top universities for the quality of the international student experience we offer. We take any matter that may affect this successful international recruitment very seriously“.

Greg Walker, deputy director of Higher Education Wales, said: “In the last 12 months, universities have seen some sudden changes to rules on study visas and there has been a wide variation in the interpretation of such rules in government offices abroad. This has unduly disrupted the application process for some legitimate and well—qualified applicants from abroad“.

Cambridge ESOL, the UK’s largest provider of English language tests, has also warned that new visa rules may not reduce the number of bogus students coming to the UK on student visas.