Immigration authorities have removed Shelbourne College from its register of approved colleges, two months after RTÉ News first revealed that the college had failed to return large sums of money owed in fee refunds to students in developing countries.

In a statement this evening the Irish Naturalisation and Immigration Service said it had been informed that the college was now seeking to go into voluntary liquidation.

It said affected students should continue to pursue the matter with Shelbourne College.

It said it would be in further contact with the gardaí in relation to the matter.

INIS said arrangements would be announced shortly for Shelbourne College students currently residing in Ireland, and where appropriate they would be facilitated in finishing their courses.

Last Friday RTÉ News revealed that the number of students owed money by Shelbourne was greater than first believed.

The Irish Council for Overseas Students has documented around 150 students owed more than €500,000 between them.

These are students who have never set foot in Ireland.

They sent Shelbourne college fees of up to €5,000 before applying for visas to allow them to come here to study.

But when their visas were refused the college did not return their money as they are legally obliged to do.

In its statement INIS said this "regrettable" situation further emphasised the need to reform the system.

The Government has designed reforms whose introduction has been held up by a court challenge.

A ruling on that challenge is expected tomorrow.

However, the proposed reforms do not include any measures that would protect students from having their money taken from them in this way.