Students could be exempted from immigration rules to help hit a pledge to cut drastically the number of non-Europeans settling in Britain under plans being considered by Downing Street.
Prime Minister David Cameron is understood to be concerned that visa restrictions are stopping wealthy foreigners from studying in British universities.
Removing students from the rules would help Mr Cameron to hit a target of cutting the numbers of people coming to live in the UK to tens of thousands of people from outside the European Union.
Figures published in May showed that annual net migration to Britain currently stands at a record high of 250,000 a year. But the Government has pledged to cut the total to below 100,000 by the next general election in 2015.
The idea of excluding students was rejected by immigration minister Damian Green last month, amid concerns that he would be seen as “fiddling” the figures.
However, Mr Cameron is now said to be increasingly sympathetic, with claims from the Home Office that the cap on students are costing the economy £2.6billion.