"A bitter pill for international students to swallow." This is how Dominic Scott, chief executive of the UK Council for International Student Affairs, describes the inflation-busting increases in overseas-student fees revealed in our lead news report.

International students starting even the cheapest (non-laboratory-based) undergraduate courses this autumn will pay eye-watering tuition fees that have, on average, exceeded the ?10,000-a-year threshold for the first time.

And yet, as these visiting students make their financial arrangements, what are they and prospective students around the world hearing about UK ÖйúAƬ? Warnings that the ancient universities could be "brought to their knees" by funding cuts and (from the head of Universities UK) that the sector is staring into an "abyss" - a "valley of death".

While such rhetoric is largely media-driven hyperbole designed to grab the attention of a UK audience in the hope that the sector may be spared the worst of the coalition government's spending cuts, it has sent a worrying message to the world and has failed in its primary purpose. Earlier this month, the business secretary, Vince Cable, made it clear that "deep cuts" were coming on top of the ?1 billion-plus already chopped from university budgets.

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So overseas students coughing up fees at unprecedented levels to join UK courses in 2010-11 may well be wondering what they are getting themselves into. Although the breach of the ?10,000 threshold may be the most striking of the data we publish this week, overseas-student fees have increased across the board. It is also worth noting that cash-strapped UK universities have bumped up home postgraduate fees, too (showing their appetite to charge domestic students more where they have the freedom to do so).

There is little doubt that the UK still provides an exceptionally good ÖйúAƬ experience to overseas students. We have a much-envied ?4 billion export market to prove it, and our market share is holding.

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But we need to tread very carefully. Martin Davidson, chief executive of the British Council, felt compelled to admit recently that even after 13 years of healthy public investment in ÖйúAƬ, some overseas students in the UK "are not having as good an experience as they expect", and to warn the sector not to see them as mere "cash cows".

Earlier this month, Sir Drummond Bone, who advised the former government on the rapid internationalisation of ÖйúAƬ, lamented the fact that around the world, UK universities were still seen as "money hungry". His report to the former government warned of a series of threats to the UK's supply of overseas students - not least from much of continental Europe, where courses for visiting students are much cheaper (sometimes even free), are of high quality and are increasingly taught in English. Other regions, noticeably Asia-Pacific and the Gulf states, are also investing heavily in ÖйúAƬ in an attempt to lure students. And while the UK still boasts a world-class ÖйúAƬ system, it cannot rest on its laurels.

As Bahram Bekhradnia, director of the ÖйúAƬ Policy Institute, says this week: "There must come a point at which our prices start to be a deterrent." How bitter can we allow the pills to get before overseas students refuse to swallow them?

phil.baty@tsleducation.com.