Tens of thousands more students who were at university during the pandemic have joined a group claim for compensation, amid reports of a £21m payout by one of the UK’s leading institutions.

Lawyers acting for student claimants said a further 30,000 from different universities had signed up to the Student Group Claim this week, taking the total to almost 200,000.

Numbers have escalated since University College London (UCL) confirmed last week it had reached a deal with 6,500 former students who launched legal action, claiming they did not receive the education they paid for during the Covid pandemic.

The university admitted no liability and the terms of the settlement were said to be confidential. However, the Financial Times reported on Wednesday that it had seen an email to claimants from their legal team which said UCL had agreed to pay £21m to settle the lawsuit.

Neither UCL nor lawyers representing the students would confirm the figure, but it is likely to send shock waves through the university sector, which is already facing severe financial challenges.

Pre-action claim letters have also been sent to 36 universities in England and Wales, including Bath, Bristol, Cardiff, Exeter, Imperial College London, Leeds, Liverpool and Warwick, but more institutions could find themselves targeted.

Shimon Goldwater, partner at Asserson solicitors, and Adam Zoubir, partner at Harcus Parker solicitors, who are jointly representing students, said: “As the terms of the settlement between the claimants and UCL are confidential, we are unable to make any comment beyond what we have stated previously.

“However, we can confirm that, since the UCL settlement was announced, approximately 30,000 additional claimants who attended universities during the pandemic have joined Student Group Claim. We continue to advance the next stage of the litigation on behalf of affected students.”

The legal action is being brought under consumer law, which states that where a consumer pays for a service but is provided with a different service of lower value, they may be entitled to compensation.

Lawyers argue that students paid annual tuition fees for in-person teaching and full access to facilities, but Covid restrictions meant their courses moved online and campuses were closed for significant periods.

Fees for online degree courses are typically 25-50% less than those for traditional in-person courses, and the students’ lawyers maintain their clients are owed “fair financial compensation”.

Dr Michael Spence, UCL president and provost, said last week: “Covid-19 created disruption across society, and universities were no exception. Throughout the pandemic we provided clear routes for students to seek redress, and many secured compensation through those established processes.

“This resolution enables us to focus on our core mission of delivering world-leading research and education.”