Terrorism fears could lead overseas students to cancel plans to study in the UK, with dire consequences for universities' income and their share of the international recruitment market, experts warned this week.

There is widespread acknowledgement among higher education heads and overseas student representatives that for the UK last Thursday's London bombings could have a similar effect on international student applications as the 9/11 attacks had on the US.

Applications to study in the US levelled off in 2002, then dropped 2.4 per cent in 2003 after five years of steady growth.

The British Council said this week that it was too early to gauge the full impact of the bomb blasts.

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But Duncan Lane, director for advice and training at Ukcosa, the council for international education, said that the bombings appeared to leave the UK market in a "perilous position".

He said there was a danger that they could be the last straw for many international students already angry at the UK's hike in visa charges and its plans to scrap visa appeals.

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He said: "The worry is that this will be one more factor that will put them off coming here."

Ilya Eigenbrot, international communications manager for Imperial, said:

"To put it bluntly, if I were a parent in Asia, I would be very worried about sending my child to the UK now."

Michael Worton, vice-provost of University College London, said there were concerns that the bombings could lead to a drop in recruitment. He said that overseas recruitment at UCL fell by 10 per cent following 9/11.

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The London bombs coincided with the peak of the US university study abroad programme when thousands of young Americans flock to the UK for credit-earning short courses run offshore by US universities.

Two US students were among the injured, one from the University of Tennessee, the other from Pellissippi State Technical Community College.

Western Carolina University cancelled a British studies programme for 42 students who were due to fly to the UK last Thursday. Michael Loughlin, the University's associate dean of distance and continuing education, said: "We decided to err on the side of caution."

But in China, currently the UK's biggest market, the British Council said all 2,000 students about to embark for a UK-based summer school were going ahead with their programme.

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