The Government's commitment to cut net migration to the tens of thousands is threatening the UK's ability to expand its share of the overseas student market, MPs have warned.
Including international students in the net migration figures is misleading and risks undermining a world-class export market, the Commons Business, Innovation and Skills Select Committee said.
Despite the United Nations' definition including overseas students, the Government is under no obligation to do this and should not do so, the MPs said.
The committee added its voice to calls for foreign students to be removed from the net migration figures, which show the number of people entering the UK for more than a year minus the number leaving.
Currently at about 216,000, David Cameron and Home Secretary Theresa May have said they want to reduce net migration to less than 100,000 by 2015.
Adrian Bailey, the committee's chairman, said: "There is a clear conflict between this policy and the desire to attract more overseas students to the UK. Moreover, the way in which the policy has been implemented and measured is clearly having a detrimental impact on the UK's ability to expand our share of the overseas student market."
Almost 70 chancellors, governors and university presidents wrote to the Prime Minister calling for overseas students to be removed from the net migration figures earlier this summer, saying it could cost the British economy millions as foreign students go elsewhere instead.
Britain attracts about one in 10 students who study outside their home country, generating roughly £8 billion a year, "with forecasts suggesting that export earnings from this activity could more than double by 2025", the campaigners said.
Nicola Dandridge, chief executive of Universities UK, added: "We must be careful about the ways legitimate concerns at home about immigration could damage our international reputation as a welcoming place to study.
"Far from deflecting the public's concerns about immigration, we believe that taking students out of the net migration equation would create a more open and focused public debate on immigration. It would also mean universities could work better with Government in targeting any international students who should not be here."