Peter Mandelson has been urged to intervene in the financial crisis which could cost 500 jobs at a London university.

Students will suffer as a result of mistakes at London Metropolitan University which are not their fault, MPs said.

They called on the Business Secretary to protect courses, student places and staff positions.

London Metropolitan, which has two campuses in central London, is cutting budgets after it was ordered to pay back £36 million for submitting incorrect student numbers.

It was accused of submitting inaccurate figures for student numbers to the Higher Education Funding Council, which meant it received more funding than it was entitled to.

Almost one in three students dropped out before completing their course, but the university claimed the figure was much lower.

MP Jeremy Corbyn (Lab Islington North) has urged Ministers to intervene, pointing out that the university takes in students from poorer and disadvantaged backgrounds.

He has sponsored a Commons motion signed by 15 MPs which "calls on the Secretary of State for Business, Innovation and Skills urgently to intervene to protect student places, courses and staff positions at London Metropolitan University."

The motion says: "The dispute over past Higher Education Funding Council for England funding is not the fault of the staff the university is trying to make redundant, the students currently studying at the university or the next generation of students who will be denied university education."

Other MPs signing the motion include Lee Scott (Con Ilford North), Harry Cohen (Lab Leyton and Wanstead), Andrew Dismore (Lab Hendon), Rudi Vis (Lab Finchley and Golders Green), and Neil Gerrard (Lab Walthamstow).

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