It is one of Britain’s unsung success stories: the phenomenal growth in the number of fee-paying overseas students.

In 1999 there were just 25,000 overseas, non-EU students in UK colleges.

Now there are nearly double that, 48,000 - just a couple of thousand short of the Government’s target of 50,000 by 2005. There are also 30,000 EU students attending UK colleges.

This huge rise is partly because of a global explosion in demand for training, but it is also a result of Tony Blair’s drive to boost foreign student numbers.

This five-year international drive to recruit overseas to FE and HE here is called the “Prime Minister’s Initiative” and is spearheaded by the British Council, under the brand “Education UK”. Targeting priority countries such as China, India, Hong Kong and Brazil, it has been a huge success.

The initiative is meant to end in in April 2005, but a buoyant British Council is pressing for it to be extended. It wants the Government to fund continuing recruitment overseas.

A survey a couple of years ago found that of 475 FE colleges, 180 said they were involved in international work. Of these, 100 said they had overseas students and around 30 actively sought them.

Bradford college, Hastings college, City College Manchester, City College Birmingham, Broxtowe college, Dudley college and Derby college are particularly active in overseas recruitment.

It is not part of a college’s mission to recruit overseas but more have decided to after the launch of the Prime Minister’s initiative.

One reason is obvious: it is a lucrative business. City College Manchester, for example, earned nearly pound;3 million from such work last year. The number of international fee-paying students at Manchester has jumped from just 70 to 600 in eight years. But it is not simply about income: home students also benefit from exposure to greater diversity.

Now a nine-strong team at the City College’s international office presides over a business that draws students from 50 countries. Students are attracted to the fact that Manchester university validates the college’s pre-degree foundation courses. Half the foundation course students go on to study at the university. Most of the others go on to other British universities. Last year around 93 per cent of the students secured places at 30 universities. Fees for the foundation programme are pound;5,600 per year. Other overseas students study A-levels, English as a foreign language and HNDs.

Dave Cronin, director of the international office, said: “In addition to the commercial benefits, there are huge long-term benefits because many students will go on to become major decision-makers in their own countries.”

The Association of Colleges points out that colleges do much broader work than simply recruiting students. There are also student and staff exchanges for courses “off-shore” and twinning with counterpart institutions.

Jo Clough, the association’s international director, said: “We would like to see the British Council initiative being extended and the Education UK brand being broadened to include distance learning, offshore delivery, twinning and exchanges.”

Colleges find their own ways of exploiting overseas markets. Chris Weekes, vice-principal of Nottingham’s Broxtowe college and chair of the AoC’s international student recruitment group, says: “Each college is different.

We run one-year pathways to higher education foundation programmes, A-levels and English language courses. That is the niche we have identified. Another college may do hundreds of HNDs in engineering.”

In 1996 Broxtowe had just 96 overseas students. Last year it had 515, making up a quarter of its full-time students. It attracts many students from China, Vietnam and the Middle East.

In collaboration with Nottingham university, the college offers nine foundation programmes for university entry. It is also linked with Loughborough, De Montford, Oxford Brookes, Aston and Nottingham Trent universities.

But entering the overseas market is not a decision to be taken lightly, Mr Weekes advises. There is no guarantee markets will continue to grow. There is the cautionary example of the late 1990s when the Taiwanese, Korean and Malaysian economies collapsed. Malaysia has yet to recover and its students have yet to return.

Vision 2020 a, British Council and Universities UK report, estimates the number of international students seeking university places here will triple to 850,000 by 2020. Three-quarters of these students will come from China and India.

This has widespread implications for colleges as well because many overseas students will need to brush up English skills andor complete foundation years.

Positioning for Success, a British Council consultative paper, wants pound;5m pumped into a drive to ensure Britain stays as a world leader in educating foreign students.

Somewhat optimistically, perhaps, it suggests such a strategy could triple the number of overseas students to 200,000 by 2010.

It would also lead to 342,000 students being taught in overseas-delivered programmes and 504,000 international students studying at UK universities, bring a cool pound;9.6 billion to the UK economy.

Should the Government fail to build on the Prime Minister’s Initiative, there are real fears that the UK could lose out to international competitors such as the USA, Australia, Germany and other European countries.