A woman who saw a group of students hurl bottles at passers-by and subject them to homophobic abuse has criticised the University of Otago for not expelling them.

She was one of a group of pipe band members in Dunedin for a competition in March who also said they saw a man at a student flat near their motel in Cumberland St drop his pants and expose himself in front of children.

The woman subsequently supplied to the university a video of revellers at the flat where a man can be heard unleashing a torrent of homophobic and racist slurs - including the N-word - at passers-by from the large rental, nicknamed ''Debacle'' in the Dunedin flat naming tradition.

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In response to the various allegations, the University of Otago launched an investigation and described the alleged behaviour as ''abhorrent''. It later confirmed the proctor was speaking to three of its students.

Vice-chancellor Harlene Hayne said in an emailed statement this week the university had dealt with the three students for throwing glass bottles, and one of them was also found to have verbally abused a member of the public.

They had all been ''excluded'' from the university, but that exclusion had been suspended to allow them to complete a period of supervised community service, she said.

''Subject to the completion of the community service, and meeting ongoing expectations of behaviour, the exclusions may be lifted.''

The student who had verbally abused a member of the public had participated in a restorative justice process with the victim, Prof Hayne said.

The three students have not been named and a young man leaving the flat yesterday said he did not know the culprits, but said they were not residents of the flat.

Speaking yesterday after learning of the university's response, the woman pipe band member, who lives in the North Island, called the actions ''bloody weak''.

''The university has taken an extremely soft approach to this.

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''They should have been expelled.

''The university should have zero tolerance to this type of behaviour.

''I'm disappointed that the university hasn't included the exposing themselves to children, that ... is a criminal offence.''

The university declined to respond to her comments.

george.block@odt.co.nz