The Department for Education and Employment has told all colleges that their articles of government are in need of an overhaul. Interpretation of existing articles were too complex, and the new Learning and Skills Act gave the Secretary of State power to replace them, DFEE officials said in a letter to colleges.

Controversial draft regulations suggest that the new Learning and Skills Council be given power to appoint external auditors. Ministers have been concerned about poor auditing in some colleges. They also want to stop colleges using the same people for both internal and external audit.

Colleges had fought off similar threats recently when the Further Education Funding Council said it wanted the power to make external checks. More than three-quarters objected, fearing for their independence.

A spokeswoman for the Association of Colleges said: “We objected to it at the time the funding council made the proposal. We are now seeking legal advice”

The new proposals also cover the procedure for staff dismissals. Regulations were changed in October 1999 following a report from MPs on Halton College. The principal and deputy had been suspended on full pay for a year before they resigned. MPs wanted controls over the length of time anyone could be suspended and whether they should have paid leave.

The Government is now proposing that the chair or vice-chair of a college must report the suspension of a senior postholder to the LSC within two working days. A special committee would have to be convened within seven days, complete a report within two months, and act on the report within a further 28 days.

There would be no need for the special committee process if the chair, vice-chair or majority of governors thought that instant dismissal was justified by the conduct.

The AOC spokeswoman said: “We need to establish whether colleges would be disadvantaged in any employment framework, or whether it would have any effect at all.”

Read David Blunkett’s remit to inspectors at www.tesfefocus.co.uk