Foreign students should be excluded from government plans to cut net immigration to the UK, former cabinet minister Lord Heseltine has said.
The ex-deputy prime minister said non-EU students should be left out of official immigration figures to avoid the risk of damaging UK universities.
He told the BBC that overseas students were "not the sort of people that are causing the anxiety about immigration".
The Home Office said students will continue to be counted in its figures.
Speaking to the BBC, Lord Heseltine said including foreign students in plans to reduce net non-EU migration risked damaging the UK's reputation abroad.
Prime Minister David Cameron has pledged to reduce net migration to less than 100,000 a year by 2015, while Home Secretary Theresa May has spoken about reducing it to tens of thousands.
The Office for National Statistics estimated that net long-term migration to the UK was 212,000 last year.
'Great asset'Lord Heseltine warned that if the UK was unable to attract foreign students it would have an impact on the "lack of finance that follows", which he said could be "serious for universities".
He added that there was "no doubt" students educated at UK universities went on to become "ambassadors" for the UK after they graduated.
"In talking about tens of thousands of people, the government will have to recognise that there are very large numbers of students in this country - in our universities, in our business schools - who are a great asset financially and educationally," Lord Heseltine said.
He later told BBC Radio 4's Today programme that students came to the UK to study and then graduate and return home whereas people who were seen as part of the immigration problem often had limited qualifications, do not have a job and put a strain on national resources.
"The public do not see students who come and go as part of the immigration problem," he added.
'Public panic'In response, the Home Office said students would continue to be counted in official net migration figures as they would still have "an impact on our communities and our public services".
In a statement, it said the government was "building an immigration system that is fair to British citizens and legitimate migrants and tough on those who flout the rules".
"While our reforms are cracking down on the abuse of student visas, which was allowed to continue for too long, we have seen applications to study at UK universities go up by 7% last year - and by even more for our world-leading Russell Group universities," it added.
The most recent Home Office figures revealed "study-related visas" in the UK had increased by 6% - to 219,053 - in the year ending March 2014.
The figures showed the number of study-related sponsored visa applications increased by 1% in the year ending March 2014 - to 209,011 - including a 7% rise in sponsored visa applications for the university sector, which rose to 168,075.
The Home Office said the increases included higher number of Chinese, Brazilian and Malaysian nationals.
Earlier this year Business Secretary Vince Cable said overseas students had become caught up in the "public panic" over migrant numbers.
He said it would be "absurd" to see a cut in student numbers as a triumph.
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