The British government is to offer financial help to genuine students affected by the decision to ban the London Metropolitan University (LMU) from teaching non-European foreign students.

Universities Minister David Willetts on Thursday announced that a £2-million fund was being set up for the purpose.

“This will provide certainty to London Met students at what is a stressful and unsettling time,” he said.

Over 2,000 students, including about 300 from India, face deportation if they are not able to find places in other universities until December.

The university was stripped of its licence to sponsor and teach non-EU students last month for not properly monitoring overseas students, resulting in widespread abuse of student visas. It has denied the allegation and is taking legal action.

Mr. Willetts also signalled a review of the student immigration regime following criticism that it is too rigid and likely to deter foreign students from coming to Britain.

In recent months, rules for student visas have been made more stringent in order to bring down immigration numbers to “tens of thousands” as part of the ruling Conservative Party’s election pledge.

Universities who rely heavily on fee-paying foreign students for their income have called for overseas students to be excluded from the migration count, arguing that other developed countries such as America, Canada and Australia do not treat students as migrants.

Mr. Willetts said that the Office for National Statistics was exploring alternative ways to “better count students in immigration flows.”

He stressed the importance of foreign students to the British economy, saying that without them “we would not only be poorer economically — we would also be more boring, more insular, and more ignorant of the wider world.”

Campaign group Universities U.K. welcomed the move as “a step in the right direction’’ but said it would like the government “to go further and remove students from net migration targets.”

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