A study from the Government’s Higher Education Funding Council for England found that enrolments from overseas declined by around 4,600 last year – reversing a long-term upwards trend.
It emerged that the number of undergraduates from mainland Europe, who pay the same tuition fees as British counterparts, fell by a quarter in 2012/13.
The number of postgraduate students joining English universities from India and Pakistan also dropped by around 25% in a year and has now halved since 2010, it was revealed.
The disclosure follows a near tripling of annual tuition fees to £9,000 for the first time in September 2012 combined with a tightening up of student visa controls.
It followed calls from a group of Conservative MPs in marginal seats to place a cap on foreign students at all but the very best universities.
But the latest study warned that the decline risked having a “major impact” on university finances, with around 30 per cent of institutions’ total income currently coming from foreign students.
It also places a question mark over the viability of some subjects at English universities such as science, maths and engineering which are currently hugely reliant on admissions from overseas.
Sally Hunt, general secretary of the University and College Union, which represents lecturers, said: “As we face continued uncertainty about the future of funding for our universities, the government should be doing more to encourage foreign students.
“Ministers need to recognise that attempts to sound tough on immigration at home are also reported elsewhere and it is not surprising if students consider studying in the countries that make an effort to welcome them.”