Ruth Gee, chief executive of the Association for Colleges, said members were campaigning for “laws of equity” in their submission to the Government’s review of higher education.

And they will be lobbying MPs and the House of Lords over the new 16-hour “guided study” entitlement for unemployed people on benefit which will replace the 21-hour rule.

Ms Gee, speaking at the annual conference of NIACE, the national organisation for adult learning, in Loughborough last week, said that students over the age of 19 should be entitled to three years’ support. She said she had evidence that colleges were being penalised under the new funding arrangements when students failed to complete courses because of financial problems. “Why should they be penalised for an inadequate student support system?” she asked.

She told the 200 delegates that an association survey of more than 100 colleges, just released, showed that many more than the 80,000 estimated by the Government were studying under the 21-hour rule. Some 36 per cent of these students were in contact with tutors for more than 16 hours a week, and many colleges expect that it would be difficult for them to get properly qualified with less than 16 hours a week tuition.

Few colleges were confident that study programmes were flexible enough to allow students to carry on with courses if they got a job. Local benefit agency offices also show a wide range of interpretations of the current regulations.

Ms Gee’s remarks came after an address by Tim Boswell, the higher and further education minister, in which he attempted to clarify the new rules.

He said: “The new arrangements, introduced from April 1996, will allow people to study for up to 16 guided learning hours. They do not cut eligibility to study from 21 hours. The basis for calculation is different. The new threshold will maintain broadly the same numbers of people able to study while in receipt of benefit as at present and broadly equates to part-time study under the present rules. Individuals can - and should - study privately in addition for as long as they like, and still remain eligible for benefit, so long as they are available for work.

“Efficiency gains, the increasing flexibility of modes of attendance and the new Further Education Funding Council funding methodology - which defines a new measure of contact study time as ‘guided learning hours’ - have led to the eradication of the distinction between full- and part-time courses.

“Courses of up to 16 guided learning hours are equivalent to part-time courses. The Government hopes that the increasingly flexible ways in which colleges are restructuring courses should enable claimants to combine part-time study and work.”

But his audience remained mostly baffled. One senior member of the executive committee said later: “I don’t think he’s got his head round the complexities. I think he’s confusing the current and future rules.”

Sue Gardener from the Urban Learning Foundation in London told Mr Boswell that the central problem of the new rules remained, in that study was seen by the Employment Department as being in competition with job-seeking. “Study is job-seeking,” she said.

Annette Zera, principal of Tower Hamlets College, said the efforts to reform the system were good in principle, “but in practice disastrous, as no way can we deliver courses in 16 hours.”