The University of East London is closing its campus in Cyprus after just six months due to poor recruitment. Meanwhile, the University of Central Lancashire is keeping a close eye on whether the nation’s financial crisis will affect its venture abroad.

The issues experienced by the two institutions highlight the potential risks in overseas enterprises, an area of increasing activity for UK universities.

Uclan had already attracted censure from the UN secretary general, Ban Ki- moon, after building its campus in the UN buffer zone separating the island’s Greek and Turkish communities.

UEL opened its Cyprus campus in October 2012, saying that the “stunning new campus offers quality facilities and a contemporary learning facility”.

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But after recruiting just 17 students, a UEL spokesman said in a statement that the institution is now “ceasing its international operations in Cyprus”.

The spokesman would not disclose how much money the university will lose.

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Asked whether students will have their fees refunded, the spokesman said: “The postgraduate students will be taught until the end of the academic year, which will finish on 6 June 2013.

“We will work with the undergraduate students to put together individual tailored plans for their continuing education.”

The eurozone bailout package for Cyprus entails a levy on bank deposits over €100,000 (£84,340) in two of the nation’s biggest banks, and there are warnings that the island faces a deep recession.

Uclan, which has about 140 students at its Cyprus campus, owns a 51 per cent stake in the joint venture company behind its €53 million development; the rest is owned by a group connected with a Cypriot developer, Hassapis Group.

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Dave Phoenix, Uclan deputy vice-chancellor, said: “We continue to monitor the situation in Cyprus and are in daily contact with our colleagues at the campus. “The initial investment was secured to enable the first phase of building, which is now complete, and we will assess the situation as new details emerge.”

Professor Phoenix said that “at this stage [we] do not know how it will affect recruitment. It may be that more local students choose to remain in Cyprus and so increase our opportunities there.”

Floros Voniatis, managing director of Hassapis, said funds held by Uclan’s partner in the development were lodged with cooperatives so would not be affected by bank levies.

Phase two of the building work is scheduled to start in the summer and the firm is “not expecting any delays - the funds are in place”, he added.

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But Mr Voniatis warned that some students were likely to be affected by the financial situation, which has seen banks closed for a lengthy period.

“We anticipate there will be effects, we know that,” he said. “The university is examining ways to be there on the side of staff and students no matter what.

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“We will not send any student home, even if their family cannot pay.”

john.morgan@tsleducation.com