UK IT students are hiring coders in India to complete their coursework for as little as £5 a go.
A-Level and university pupils are logging onto computer-coding websites and farming out their work to foreign IT graduates.
Academics at Birmingham City University have detected 1,000 students cheating worldwide since they began monitoring the websites in 2004.
The majority of these students are studying an IT-related course and about one third are based in the UK.
Students contract their work to the lowest bidder, with prices ranging from £5 for simple undergraduate coursework to £100 for postgraduate dissertations.
Birmingham City University computing lecturer Thomas Lancaster said the practice is spreading as more websites spring up, particularly in India and Romania, and that the trend could be more prevalent than thought, as it is very difficult to detect.
Lancaster and fellow Birmingham City University lecturer Robert Clarke are calling on the government to set up a national database of university assignments so they can be matched against contract requests on coding websites and traced back to students.
Lancaster said: "We have seen examples of whole final-year dissertations being contracted out and submitted in stages to match when the work needs to be handed in."
"The problem is definitely getting worse. It is hard to detect. The number of these sites is spreading all the time and it is impossible for us to monitor all of them," he said.
He added: "It is impossible to stop these sites being used, but the academic community has to be more vigilant about the work being handed in."
Lancaster and Clarke want academics to test whether students have detailed knowledge about their work by questioning them about work they have handed in.