The leader of Britain's university chiefs has defended the lucrative practice of accepting foreign students with inferior exam results.
Prof Crewe says UK students are not suffering as a result
Universities UK president Ivor Crewe said institutions which lowered entry requirements for non-EU applicants were not depriving Britons of places.
They had to find extra income, as the government had failed to pay the full costs for domestic students, he said.
Professor Crewe has been a prominent supporter of raising tuition fees.
'More money needed'
His comments come after an undercover investigation by the Sunday Times, in which reporters posing as students from South Africa and Britain approached a number of leading universities.
They allegedly found a quarter of the departments in question were willing to accept lower A-level or International Baccalaureate grades than usual
from the South African, who would pay full fees.
The universities were not willing to do the same for the British student, the newspaper reported.
In a speech to the Centre for Reform think tank, Prof Crewe, vice-chancellor of Essex University, said higher fees, plus more money from the government's Comprehensive Spending Review, were welcome.
UK degrees have a good reputation overseas
But they were still insufficient to ensure UK universities could compete for the best students and academics worldwide.
Between 1997 and 2003, the number of non-EU students at UK universities increased from 117,000 to 185,000.
Prof Crewe said: "The presence of students and faculty [academics] from overseas is no longer an optional mildly exotic ingredient of campus life."
He added: "It is what makes it possible for academic enterprise to continue."
It cost "considerably more than it pays" to educate UK and EU students.
Universities received only about £4,400 from the taxpayer plus up to £1,175 from the student in fees for domestic undergraduates. In most cases the fees are fixed by the government.
By contrast, non-EU students might have to pay double that. Fees are not fixed.
Prof Crewe said they were willing to pay £18,000 a year in fees, expenses and travel - or £54,000 for a degree - because British universities had a reputation for quality and low drop-out rates.
If under-funding of higher education continued, that reputation would be under threat, he added.
Universities offering places to less well qualified non-EU citizens were not "discriminating against UK students".
The Higher Education Funding Council for England (Hefce) effectively set quotas of domestic students for each university, he added.
If they exceeded this, they would get only up to £1,175 per extra undergraduate.
If they recruited fewer, Hefce took their grant back pound for pound.
Prof Crewe said: "Universities are not accepting less well qualified students for places that would otherwise be available to UK students.
"They are expanding the number of places in the university in order to admit overseas students, whose fee income is critical to the financial future of the university."
The Liberal Democrat education spokesman Phil Willis said Mr Crewe was wrong to say there was nothing wrong.
"While foreign students are welcome when bringing quality and diversity to our universities they should not be given places just because of the cash they bring with them.
"There must be no dumbing-down of higher education. All students
should be judged on their qualifications and educational potential.
"Mr Crewe's comments show that the government's fudge on top-up fees will not solve the higher education funding crisis. They also make it clear that fees will be raised considerably when the cap is lifted in 2009."