The Pitman Training Group, one of the UK’s leading providers of office skills training, wrote to then Education Secretary David Blunkett, in September and again in October last year, to express concern about the possibility of maverick providers.

Last month the Government suspended the training subsidy scheme, saying there had been evidence of fraud and mis-selling. Many providers are facing closure or redundancies as a result.

In an Opposition debate in the Commons this week, Damian Green, shadow education secretary said: “All the serious bodies and genuine training providers in this country warned the Government that there was something wrong with the scheme and that it was wide open to fraud, but the Government did nothing.”

He said the Government had been shelling out tens of millions of pounds of taxpayers’ money not knowing whether the training was fraudulent. He has referred the matter to the Public Accounts Committee.

Estelle Morris, the Education Secretary, said that out of 2.5 million account holders, there had been 8,448 complaints. Every allegation had been investigated and police had brought charges against four providers and 30 individuals.

Asked if the suspension meant the end of the scheme Ms Morris was cautious. “I can give a cast-iron guarantee that this is not the end of Government funding for adult learning, or of support for those who find a lack of money a barier to returning to education and training ...

“I am loath to say whether the future provisions will be called ILAs or something else.”

Tim Boswell, a former Tory education spokesman, wondered if the scheme had been stopped because of funding problems.

The scheme had proved more popular than expected. Some 2.5 million people applied for learning accounts, instead of the planned one million, creating a “serious budget crisis” at the Department for Education and Skills.