Five colleges may be helped to refocus some of their courses to enable them to qualify for funding and stave off financial problems.

After a meeting with principals from the five adult education colleges, Bill Rammell, minister for further education, insisted the Government’s priorities were right. Speaking at the City Lit in central London, which he called a “superb” institution, he said: “This idea that we are not funding adult education is simply not true.

“There is a problem here, given that without 16 to 19-year-olds, you can’t cross-subsidise, and the LSC has recognised that.

On a tour of classes at City Lit, Mr Rammell was told how recreational courses, much-criticised by the Government in defence of its priorities, can prepare students for work. A jewellery class was packed with students intending to start their own business.

City Lit faces a deficit of about pound;800,000 if it does not get more funding. Increasing fees, already twice the average, caused income to drop last year as students were discouraged. Principal Peter Davies said: “We want to see if we can align our provision more closely with the skills agenda. I’m a born optimist.”