Staff at the embattled UK Border Agency failed to check thousands of tip-offs about overseas students, including whether they had actually enrolled on courses, according to a new report.
Chief Inspector of Borders and Immigration John Vine found that the UKBA had allowed a backlog of 153,000 notifications from sponsors of non-EU students to build up, including whether students had enrolled on courses or were turning up for classes.
This could potentially have meant that thousands were wrongly allowed to remain in the country, he said.
The tip-offs were all reviewed by May this year, but Mr Vine said it must be an "ongoing priority" to make sure checks are carried out.
His team examined work at three UKBA offices in Sheffield, Beijing and Delhi.
The report found: "The agency had no targets in place for responding to notifications made using the sponsor management system.
"As a result, notifications of changes to circumstances of students, details of students failing to enrol or attend classes, or curtailment of sponsorship were not being acted upon.
The agency had no targets in place for responding to notifications made using the sponsor management system. John Vine
"Over 150,000 notifications had accumulated and were awaiting action, meaning that potentially thousands of students had retained leave to remain when they should not have done so. This was a significant failure."
However, Mr Vine said his findings were "generally positive" and that he was "pleased" that the agency had reviewed the notifications.
He said: "I was pleased to note that in May 2012 the agency had reviewed outstanding sponsor notifications and launched an operation to identify and remove people, including students, who had overstayed beyond the term of their visa. This should be an ongoing priority rather than the subject of a one-off operation by the agency."
The report is the latest to highlight failures at UKBA. Last week Mr Vine claimed that the agency had supplied misleading figures to MPs over the number of immigration cases that had been archived.
He found that 33,000 cases had not been included in figures given to the Commons home affairs committee.
The report revealed that at one point 100,000 pieces of post were left unopened as staff struggled to deal with an immigration backlog.
It also said that 2,000 people whose cases were placed in the archive because they could not be traced were actually reporting regularly.
On Tuesday UKBA's director of international operations and visas, Jonathan Sedgwick, and former UKBA chief executive Lin Homer both apologised to the committee for inadvertently supplying the wrong information.
Committee chairman Keith Vaz warned them that it would be treated as contempt if it happened again, and told Ms Homer: "We are very concerned and shocked at what Mr Vine has said and I'm glad you've come here and apologised and accepted your share of the responsibility."