UK Tier 1 (GE) visa advise required

After completing the graduation from UK leading university my wife submitted her business plan to her university, which was approved straight away. Project was to present to the enterprise team after this approval. But, the head of enterprise team was on holidays at that time. He came back after two weeks and our visas were expiring shortly. Time was too short to complete final board meeting before visa expiry. So, head of enterprise team assessed the project in pre-assessment panel and being satisfied from it, he arranged to apply my wife Tier-1 GE visa within the legal stay time from the University assuring that University will issue Endorsement Letter if I pass final board presentation. Board took her presentation and she was successful in that presentation. Now, we were expecting Endorsement Letter to be issued. But, we got instructions from University to withdraw our case and go back to our country. The university said that they will only release the endorsement letter if we go back and apply from our home country.

please advise us what we will do in this situation , shall we trust the university?

How can we answer that questions ?? If that is the case at the university, you need that letter to apply. So leave the UK and apply from outside