Aljazeera reports that the religious schools have asked opposition political parties to protest against the government's decision.
The estimated 13,500 schools, known as madrassas, have long been regarded as a recruiting ground for Muslim fighters.
Three of the four bombers who killed more than 50 people on London's transport system in July were of Pakistani origin, and at least one visited a madrassa with known extremist links.
After the bombings, General Pervez Musharraf, the Pakistan president, vowed to deport foreign madrassa students. His government also warned that madrassas would be closed unless they registered with authorities by the year's end.
Last week, the Interior Ministry increased the pressure, issuing an order that madrassas should expel foreign students by 31 December.
But late on Thursday, Aftab Khan Sherpao, the interior minister, appeared to back down from that order and ruled out immediate expulsion of students.
President Musharraf has pledged
to clean up the Islamic schools
"There is no deadline for it," he told the private Geo TV network.
Hanif Jalandhri, the head of the main association representing the religious schools, the Federation of Madrassas, said on Friday about 1000 foreign students had left since July but more time was needed for the 700 others to leave.
He urged the government not to resort to police action. "If they did it, it would be a highly unwise step on their part," he told The Associated Press, adding that madrassa organisers would meet in Islamabad on Sunday "to resist any such forced expulsions".
"Foreign students are not criminals. They are just getting Islamic education," Jalandhri said.
None rounded up
In eastern Punjab province, the local government ordered on 22 December that police should ensure that 91 foreign students from countries including Indonesia, the Philippines, Thailand, Jordan, Kazakhstan, Tanzania and Bangladesh were expelled from madrassas by Saturday, but as of Friday none had been rounded up.
"Foreign students are not criminals. They are just getting Islamic education"
Head of the Federation of Madrassas
Lahore city police chief Tariq Saleem said the police would act as the government instructed after 31 December.
The government's apparent indecision casts doubt over its determination to rein in madrassas, which largely operate outside state control, providing free schooling and board to at least 1.1 million students, many from poor families.
In July, Musharraf vowed to modernise madrassas and shut those that spawn "sectarian hatred and militancy" - renewing a similar promise that led to little concrete action after the September 11 attacks in America.