Interviews carried out by the Home Office suggested that more than half of applicants from some countries were not genuine.
They either lacked the money or the intention to study in British colleges or universities, or were likely to stay after their courses finished.
Migration Watch UK, a pressure group, estimates that based on these figures, as many as 63,000 bogus students could have been granted visas in 2011.
It is calling on the authorities to make planned interviews with potential foreign students more stringent, by asking them if they intend to leave Britain after graduation.
Sir Andrew Green, chairman of Migration Watch, said: “We now have clear evidence of abuse on a major scale. Bogus students come here to work illegally and thus take jobs from British workers.
“If it is clear from the circumstances that a student is unlikely to go home, the visa should not be granted in the first place. After all, many of the advantages claimed for foreign students depend on their going home after their studies.”
It comes amid a growing row over the value or cost of foreign students to the British economy.
After the election ministers promised to cut net migration—the number of new arrivals to the country minus those who leave—to the “tens of thousands” by 2015.
The free movement of citizens across Europe means that the easiest way to reduce immigration is to cut the numbers of young people arriving, mainly from Asia, to study at British universities and colleges.
However vice-chancellors and business leaders say foreign students are a vital source of income and want the Government to take them out of calculations of immigration.
Sir Andrew said: “It is, in fact, impossible to take students out of net migration because, unlike the US and Australia, we still have no exit checks so nobody knows how many who came as students have actually left the UK.”
As part of attempts to weed out bogus students, the Home Office plans to reintroduce interviews to establish applicants’ credibility.
A three-month pilot study, published earlier this month, saw 2,316 interviewees asked about their suitability for the proposed course, their ability to support themselves financially and their intention to leave Britain at the end of their studies.
In total up to 44 per cent of applicants could have been refused a visa had they undergone interviews and new credibility tests, with the figure rising to 59 per cent among students from India, Nigeria and Bangladesh, and 62 per cent among Burmese. Although most were applying to study at private colleges, 14 per cent wanted a visa to attend university.
The pressure group said that out of the 141,700 student visas granted in 2011, it could mean that as many as 63,069 went to bogus applicants.
However all of those classified as potentially bogus in the pilot study were actually given visas, as immigration officials did not have the power to refuse them entry on credibility grounds.
Although the Home Office will now question thousands of applicants to check they are genuine, officials will not ask if they plan to return home after studying.
Sir Andrew said: “These half measures simply will not do. The Government have bottled out on bogus students. If they are serious about immigration they must face down the self-interested demands of the higher education sector and pursue the public interest.”
Immigration Minister, Damian Green, said: “We have radically reformed the student visa system precisely to weed out abuse and protect the UK from those looking to play the system.
“This includes interviewing applicants and giving officers the power to refuse visas if they are not satisfied the applicant is genuine.
“Applicants will be asked a variety of questions designed to assess their intentions and determine whether they are credible. We will keep the assessment criteria under review.”