More overseas students could distort results because they expect good degrees in return for fees, uni watchdog warns

Peter Williams, who heads the Quality Assurance Agency, criticised the traditional system of firsts, 2.1s, 2.2s and thirds as 'arbitrary and unreliable'.

He also warned that growing numbers of students are coming to Britain from overseas expecting their fees will automatically buy them a degree.

Foreign students at Oxford University. The agency has said that many foreign students just 'expect' to get a degree after paying for their course

Academic standards could suffer because universities are increasingly reliant on the income from foreign students to survive, he said.

Mr Williams spoke as he published a series of reports criticising universities' practices for awarding degrees, upholding standards and tackling plagiarism.

However, he insisted it would be wrong to see universities as a 'wasteland of bad standards'.

His intervention will reopen the debate over reform to the 200-year-old honours degree system.

A long-awaited review last year recommended a new system for detailing marks in individual courses alongside an overall grade, but stopped short of calling for traditional classifications to be scrapped.

However, Mr Williams told BBC News that the honours degree system has become 'meaningless'. All universities use the same system, but the abilities of students at different institutions differ widely, he said.

'It is quite clearly nonsense to say they're all of equal value,' he added. 'Should we try to pretend the outcomes are the same?'

Mr Williams argued that universities are 'shooting themselves in the foot' by trying to fit all students into the same grading system. 'The way that degrees are classified is a rotten system,' he added. 'It just doesn't work any more.'

He also warned that some universities are recruiting overseas students  -  who pay full-cost tuition fees while charges for domestic and EU students are capped  -  in an 'unsustainable fashion'.

At one university, more than 40 per cent of its intake is from abroad.

'There is a belief from some overseas students that if they pay their fees, they will get a degree,' he said. 'We have to make clear that does not operate here.'

He warned that the use of agents to recruit overseas students could aggravate the situation.

'The problem is that when agents are paid to recruit overseas students, they might be encouraged to take short cuts,' he said.

Mr Williams, whose reports draw on nearly 60 separate audits of universities, also raised concerns about the effectiveness of the external examiner system, where academics from other institutions are brought in to verify exam standards.

Some universities required them simply to 'tick boxes' instead of evaluating assessment arrangements properly.

His reports uncovered inconsistencies in marking and varying practice in dealing with plagiarism.

At one university, 'the regulations on plagiarism were found to be capable of varying interpretation'.

Diana Warwick, chief executive of the vice-chancellors' umbrella group Universities UK, said: 'The quality of UK honours degrees is the envy of the world.'