The number of overseas students at English universities has fallen for the first time in nearly 30 years as students choose the United States and Australia instead due to tougher visa rules and higher fees, research showed on Wednesday.
Numbers fell to 307,205 in 2012 from 311,800 in 2011, the first drop in 29 years, analysis by the Higher Education Funding Council for England (HEFCE) showed, despite foreign student numbers rising in other countries.
The data is a concern for the 73-billion-pound ($121-billion) higher education sector, with international and EU students making up 30 percent of full-time university entrants, worth 10.7 billion pounds a year in fees and other spending.
HEFCE data showed higher education accounted for 2.8 percent of UK GDP in 2011 and almost 760,000 jobs.
Stricter visa regulations, imposed as Britain tries to curb immigration, and higher tuition fees in England explained the drop, HEFCE said. No figures were available for Scotland, Wales and Northern Ireland which set their own university fees.
Chief Executive Madeleine Atkins called for more research to establish the risks this downturn may pose to the financial positions of English universities and any wider impact.
"Supporting high-quality international education is a crucial part of ensuring that the UK continues to engage with, and benefit from, the increasingly interconnected world," Atkins said in a statement.
The data showed the number of EU undergraduates fell by almost a quarter in one year, to 17,890 in 2012/13. This was blamed on annual tuition fees almost tripling to 9,000 pounds in 2012, a change that affected both UK and EU students.
The HEFCE found the number of students from India and Pakistan has halved since 2010 to about 13,000 as foreign students are also deterred by stricter visa regulations.
Despite the falling numbers, the HEFCE found 74 percent of postgraduates come from overseas with almost equal numbers of UK and Chinese students in full-time postgraduate masters courses, at 26 percent and 23 percent respectively.
Business Secretary Vince Cable has often warned against imposing a migration target in Britain, saying it threatens - among other things - to hit recruitment of overseas students who pay full fees and help keep universities afloat.
The target to cut the number of migrants entering Britain to below 100,000 year is favoured by the Conservative Party which runs the government with Cable's Liberal Democrats.
A spokeswoman for the Department of Business, Innovation and Skills said international students made a huge contribution in Britain, boosting the economy and cultural life.
"That is why there is no cap on the number of legitimate students who can study here," she said in a statement.
But lobby group Universities UK said it was worrying to see the number of overseas students falling at a time when there was growing demand globally for quality higher education.
Nicola Dandridge, Universities UK chief executive, said Britain needed policies that attract students to match active promotion policies by competitor countries.
"This should be supported by a welcoming climate for genuine international students, with visa and immigration rules that are proportionate and properly communicated," she said, flagging a lobbying drive before Britain's 2015 election.
Related: List of Scholarships in the USA for International Students