The Learning and Skills Council was due to announce in January its plans for the city, expected to include the merging of three colleges, but the decision was postponed until May.

David Hughes, the regional director of the East Midlands LSC, said the plans for college reorganisation will not now be unveiled until July.

“It is so significant for Nottingham that if we get this wrong we will have another 20 years of horror and terror,” he said.

A review carried out last year proposed the merger of Broxtowe, People’s, and South Nottingham colleges. “That is still on the cards but there are other options we want to consider,” he said.

The council, he disclosed, wants to see the delayed publication of the inspection report on People’s college, which is widely expected to be poor, before making a final decision.

It is also awaiting the outcome of discussions with New College over its financial situation. “We are clear now that the financial position of New College is not good,” he said.

Information supplied by the college suggests that additional support may be required due to lower than anticipated student numbers and because of the costs of previous restructuring.

A third reason for the delay, said Mr Hughes, is to assess the changes in the national emphasis on FE targets, which challenge colleges to focus on priorities such as 16 to 19-year-olds and basic skills.

This requires significant change, he said, which will involve the “winding down” of franchising and partnership work and which will mean that some independent training providers lose their contracts.

“There is quite a high reliance on franchising in Nottingham,” he said, “and there will be more pressure on franchising and partnership work that doesn’t meet our priorities.

“Some of these franchise contracts are good, but if they are not, there is a danger that we will see fewer of them.”

Nottingham, he added, has one of the lowest post-16 staying-on rates in the country and one of the lowest GCSE achievement rates, yet there is “massive under provision” of level 1 and level 2 (GCSE equivalent) courses.

He said: “Our objective is to offer learners provision that meets their needs and equips them with the skills required by employers.

“From the review we know that there are not enough courses available for young people leaving school with few qualifications and we need to address this.

“We also know that too many local employers find it difficult to recruit people with the craft and technical skills they need. Again, this has to be addressed.

“There is duplication in some areas of learning, where the needs of the learner would be better served by colleges working in collaboration rather than competition.”