Proposed new restrictions on student visas would result in "dire consequences" for the UK's universities, a report warns.
A study for the Higher Education Policy Institute (Hepi) said the measures would cut the number of foreign students coming to UK universities, losing billions of pounds in income.
The plans were better designed to cut recruitment than visa abuse, it added.
The government said talented overseas students were vital to the economy.
Its plans include reducing the number of foreign students studying below degree level, raising the students' language requirement and limiting their entitlement to work and bring their family to the UK.
It also proposes to improve the accreditation process and inspections for education providers to weed out bogus colleges.
The report by Professor Edward Acton, vice-chancellor of the University of East Anglia, points out that overseas students bring in vital income worth nearly £5bn a year in fees and off-campus expenditure.
They are often charged much higher tuition fees than home students.
"In a tricky funding period most universities plan to expand international numbers in the immediate future. The ability to do so reflects and enhances the reputation of UK higher education internationally," the report said.
Prof Acton warned: "To implement the proposed measures as they stand would amount to a hostile act against Britain's universities."
He also said that the plans to reduce the number of students studying below degree level would not only cut fee income by about £1bn, but also reduce subsequent undergraduate numbers.
Currently, large numbers of international students take so-called "pre-university pathway courses" that prepare them for undergraduate study.
Prof Acton says more than 40% of international students at UK universities have come via a pre-university pathway course, and he warns that 70% of recruits to these courses would be barred by the language requirement change.
The report says: "For recruitment from countries where English is not one of the official languages, combining academic preparation with intensive English language tuition from native speakers is essential.
"Sever the link and the damage inflicted on our universities will be severe."
'Vital to the economy'
The report also suggests the measures are based on statistics that "are not fit for purpose". These are figures from the International Passenger Survey, which questions a small proportion of people leaving the UK.
The government's Migration Advisory Committee has criticised the reliability of IPS figures, saying that they "massively undercount ex-students leaving the country".
Immigration minister Damian Green said talented overseas students were vital to the UK economy but added that the country had to be more selective about who could come and how long they could stay.
"Our proposals are targeted measures, which will seek to reduce abuse of the current system - mainly seen in those coming to study at lower levels and at private institutions of further education, and by increasing the quality of those who are able to use the student route.
"The brightest and the best who have the greatest contribution to make to the UK will continue to be welcomed."
Hepi director Bahram Bekhradnia said: "This proposal, if implemented, will reverse what has become one of this country's most successful recent economic growth areas."
Sir Andrew Green, chairman of Migrationwatch UK which campaigns against mass immigration, said the statistical basis for Prof Acton's report was "thoroughly unsound".
The government's proposals were intended to target bogus students in privately funded higher education colleges, he said, adding he was "strongly in favour of genuine students".
But general secretary of the UCU lecturers' union Sally Hunt warned there would be an impact on Britain's "ability to compete effectively on the global stage".
"We cannot afford to be sending out the message that we are closed for business," she said.
Libby Aston, director of the University Alliance of larger, business-focused universities said: "This is not about bogus language colleges. These changes would have serious consequences for universities across the country and will be yet another blow to the economy. Now is not the time to be taking spenders and knowledge out of the economy nor limiting university's income further."