The government is to slash the number of foreign students studying in the UK, as well as reducing the number of visas for highly skilled workers by a fifth.

New visa restrictions were outlined today by Theresa May, the home secretary, who said that net migration to the UK was “out of control”.

She told Parliament that the government would introduce new measures to “reduce net migration from hundreds of thousands to tens of thousands”.

Only the most “economically beneficial” cases would be supported, Ms May said, adding that as many as two-thirds of non-European Union migrants were students.

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“Nearly half of all students coming from abroad are coming to study courses at below degree level, where abuse is particularly common…Too many students at this level have been coming here with a view to living and working, not studying,” she said.

The government will now consult on proposals to restrict entry to students at degree level, with “some flexibility” for highly trusted sponsors at lower levels.

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The move is also aimed at reducing the number of bogus “colleges”, which Ms May said damaged the reputation of the UK.

“We don’t want people thinking they are coming to a college and find they are coming to something quite different. We’re looking at the measures that can be taken against those so-called colleges that just allow people to come over here and work,” she said.

Ms May also confirmed that the number of visas issued to skilled workers through Tier 1 and Tier 2 would be cut by a fifth next year, from 28,000 to 21,700.

This would be achieved by limiting the number of Tier 1 visas to 1,000 – a reduction of 12,000 – while increasing the number of Tier 2 graduate visas to 20,700.

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She said Tier 1 would be now be reserved for “people with exceptional talents”, including scientists, academics and artists, alongside investors and entrepreneurs.

However, intra-company transfers for those employees earning more than £40,000 a year are exempt from the visa restrictions. The limits for 2012-13 are to be reviewed by the independent Migration Advisory Committee.

The University and College Union said the measures would damage the reputation of UK higher education.

“We need to be able to offer places to the world’s best and brightest. The last thing we want to do is send a message to academics and students that they are not welcome here,” said general secretary Sally Hunt.

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hannah.fearn@tsleducation.com