Almost £40m has been spent on UKeU, the government's flagship online learning scheme, to attract just 900 students - £12m more than we revealed a year ago.

Computing today calls for a review of the money spent on the organisation, which was set up to give overseas students the chance to earn degrees online.

The government allocated £62m to the Higher Education Funding Council for England (Hefce) for the project in February 2000.

Hefce has so far provided £32.6m for UKeU, mainly to support the creation of an elearning infrastructure.

A further £7m of the funding was used to set up the project and various elearning programmes in higher education institutions, according to Alan Johnson, Minister for Lifelong Learning and Higher Education.

That adds up to an investment of £39.6m - subsidising distance learning to the tune of £44,000 per student.

Steve Molyneux, director of the LearningLab and a leading UK elearning expert, supports Computing's call for an investigation into expenditure on UKeU.

'The government should conduct a thorough review of its spending activities,' he said.

'It should have listened to experts in industry and the people who said the business wasn?t right 12 months ago.'

Labour MP Derek Wyatt says the Open University (OU) should have been given responsibility for the project.

'For probably £5m or £10m, we could have set up the OU for the 21st century,' he said.

The OU is willing to be involved in discussions on UKeU's future.

'We know from experience that ensuring success for such a venture, both in educational and economic terms, depends on numerous complex factors,' said a spokesman.

Hefce is in discussion with UKeU to agree a restructuring plan after the scheme failed to meet its first-year target of 5,600 students (Computing, 4 March).

The plan will be considered by the Hefce Board on 22 April.

Hefce says it is evaluating the UKeU technology platform to assess its future role.