AUSTRALIA is in denial on racially motivated attacks against international students and has failed to take action to deal with the issue, an internationally respected Australian academic has told a major conference in Switzerland.

Melbourne University professor Simon Marginson, delivering a keynote address to the World Universities Forum in Davos, said the Australian government was trying to spin itself out of crisis following this month's murder of Indian accountancy graduate Nitin Garg in a west Melbourne park. "The Australian government is in denial," Professor Marginson told the high-powered meeting of academics. "Racist targeting is involved (in the attacks). Indian students do have a special problem. And there isn't enough official and civil concern about international student security in Australia."

Garg's unsolved murder has sparked diplomatic, government and public protests in India, further weakened one of Australia's most important education export markets and prompted a defensive response from Australia's political leaders and Victoria Police.

Foreign students are Australia's third-largest source of export revenue at $15 billion a year.

Professor Marginson, a professor of higher education and a globally recognised expert on international education, called for the establishment of a "cross- border agency" to help safeguard international students globally.

India's Foreign Minister, S.M. Krishna, yesterday warned that continued violence against Indian students could damage relations and called for immediate "corrective action" by Australia. This followed a decision by the Indian government to issue a travel warning advising expat students to take precautions while living in Australia generally and Melbourne in particular.

Foreign Minister Stephen Smith was yesterday in talks with Mr Krishna. "We both agreed this was an issue we did not want to disturb or get in the way of what the External Affairs Minister described as an excellent relationship," Mr Smith said.

In a statement released after their conversation, Mr Krishna "reiterated the need for immediate corrective measures, pointing out that the issue had consistently figured in our parliament".

"Australian leaders had, time and again, reassured India that Australian authorities were treating the assaults with utmost seriousness," the statement said. "However, the incidents seem to be continuing."

In his address on Saturday, Professor Marginson told the World Universities Forum there had been only "modest" increases in policing at trouble spots. He accused Australian politicians of implying to India that greater action was being taken.

"The Australian government is not prepared to acknowledge that international students need special additional public money."