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David Willetts told the universities conference that the London Met issue should not jeopardise the £8bn-a-year export earnings brought in by the 400,000 foreign students. Photograph: Chris Radburn/PA

The universities minister, David Willetts, is to launch a global drive to "protect Britain's reputation" and spread the message that it remains open to students from overseas in the wake of the government's curbs on student visas.

He is also to set up a £2m hardship fund to help "legitimate overseas students" at London Metropolitan University, who face extra costs as a result of the home secretary's decision to strip it of its licence to sponsor overseas students.

But Willetts stopped short of demands from vice-chancellors to remove overseas students from the government's drive to reduce net migration to below 100,000 by the next election.

Instead, Willetts told a universities conference in Keele that the Office for National Statistics would publicise statistics that made clearer the separate contribution of overseas students to immigration and try to improve estimates how many go home at the end of their studies.

The university lecturers' union said it appeared the government was finally recognising the damage its student visa policy was doing to Britain's international reputation.

Willetts's olive branch to the higher education sector over the government's drive to curb numbers of students from overseas came as 21 September was fixed as the date for the high court to hearing for London Met's legal challenge to the revocation of its Home Office sponsorship licence.

The minister also suggested it was necessary for higher education to develop a longer protection scheme for foreign students – similar to the Abta guarantee when travel agents fail – should other universities face a similar situation.

Universities UK said it welcomed the setting up of the £2m London Met hardship fund and would take part in talks over a protection scheme. While it welcomed changes to the immigration figures to show what contribution students were making to reductions, it wanted the government to go further and remove students from the net migration target entirely.

The University and College Union's general secretary, Sally Hunt, said: "It appears the government is finally recognising the damage its student visa policy, coupled with threatening to deport thousands of fee-paying overseas students, is doing to our international reputation."

The National Union of Students said the immigration statistics already gave details of overseas student flows in and out of Britain, and criticised the £2m hardship fund as offering "scant relief" to students who faced an average bill of £4,610 each as a result of moving university.

Willetts told the universities conference that the London Met issue must not be allowed to jeopardise the success story of the 400,000 overseas students who bring in almost £8bn a year in export earnings. He said it was necessary to take short-term action "to protect our international reputation" beyond the London Met hardship fund and the mini-clearing operation that will start next Monday.

"We have already used our Foreign Office posts to signal that we remain open to overseas students," Willetts said, before announcing a joint publicity drive with Universities UK in key newspapers "in our target markets", explaining that overseas students are welcome in Britain and reminding them of what a great opportunity it is to study in the UK.

Willetts acknowledged that the public did not regard overseas students as immigrants and saw "someone coming to study for a time and then going back home as different from someone permanently coming to Britain as a migrant".

But the minister made clear that they would not be removed from the overall net migration count: "We will publish disaggregated figures. We will disaggregate the headline totals for net migration so that people can see the student element within that. We are not removing students from the totals. We are improving the quality of data on students leaving the country."

Home Office ministers argue that the international definition of an immigrant covers anyone who goes to a country for more than 12 months and that removing them from the net migration statistics would look like the government "fiddling the figures" to meet their 'below 100,000' target. The latest net migration figure shows that 216,000 more people to live in Britain in 2011 than emigrated abroad. Students accounted for 232,000 of the 566,000 who were classified as long-term immigrants to Britain in 2011.

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Already planned are naval exercises and new antimissile systems in the Persian Gulf, and a more forceful clamping down on Iranian oil revenue. The administration is also considering new declarations by President Obama about what might bring about American military action, as well as covert activities that have been previously considered and rejected.

Later this month the United States and more than 25 other nations will hold the largest-ever minesweeping exercise in the Persian Gulf, in what military officials say is a demonstration of unity and a defensive step to prevent Iran from attempting to block oil exports through the Strait of Hormuz. In fact, the United States and Iran have each announced what amounted to dueling defensive exercises to be conducted this fall, each intended to dissuade the other from attack.

The administration is also racing to complete, in the next several months, a new radar system in Qatar that would combine with radars already in place in Israel and Turkey to form a broad arc of antimissile coverage, according to military officials. The message to Iran would be that even if it developed a nuclear weapon and mounted it atop its growing fleet of missiles, it could be countered by antimissile systems.

The question of how explicit Mr. Obama’s warnings to Iran should be is still a subject of internal debate, closely tied to election-year politics. Some of Mr. Obama’s advisers have argued that Israel needs a stronger public assurance that he is willing to take military action, well before Iran actually acquired a weapon. But other senior officials have argued that Israel is trying to corner Mr. Obama into a military commitment that he does not yet need to make.

On Sunday, Prime Minister Benjamin Netanyahu appeared to criticize Mr. Obama for being too vague about how far Iran can go. “The international community is not setting Iran a clear red line, and Iran does not see international determination to stop its nuclear project,” he told his cabinet. “Until Iran sees a clear red line and such determination, it will not stop the progress of its nuclear project — and Iran must not be allowed to have nuclear weapons.”

None of the steps being taken by the Obama administration addresses the most immediate goal of the United States and its allies: Slowing Iran’s nuclear development. So inside the American and Israeli intelligence agencies, there is continuing debate about possible successors to “Olympic Games,” the covert cyberoperation, begun in the Bush administration and accelerated under Mr. Obama, that infected Iran’s nuclear centrifuges and, for a while, sent them spinning out of control. An error in the computer code alerted Iran to the attack in 2010, and since then many of the country’s nuclear sites have been modified to defend against such attacks, according to experts familiar with the effort.

All of these options are designed to buy time — to offer Israeli officials a credible alternative to a military strike that would almost certainly trigger an Iranian reaction and, the White House and Pentagon fear, could unleash a new conflict in the Middle East. While Mr. Obama’s national security team has been very closed-mouthed about the tense discussions with Mr. Netanyahu, the chairman of the Joint Chiefs of Staff, Gen. Martin E. Dempsey, gave voice to the concerns in London on Thursday.

General Dempsey repeated the familiar American position that an Israeli attack would “clearly delay but probably not destroy Iran’s nuclear program.”

But then he went beyond any warning that Mr. Obama has given to Israel in public, saying that the international coalition of countries applying sanctions against Iran “could be undone” if the country was attacked “prematurely.” He added: “I don’t want to be accused of trying to influence, nor do I want to be complicit if they choose to do it.”

United States intelligence officials have said they have no evidence that Iran’s top leaders have decided to take the final steps toward a weapon. Iran’s intentions remain unclear, intelligence officials say.

Last week, the International Atomic Energy Agency reported an increase in the number of centrifuges that Iran has installed in an underground enrichment plant that is largely invulnerable to Israeli attack, but also indicated that Iran has converted some of its most highly enriched fuel to a form that would be difficult to use in a weapon.

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