Leeds Metropolitan University and Harrogate College are considering the merger to create what they see as a "seamless robe" of higher and further education. The bid by the college follows abortive merger talks with two FE colleges after it failed to hit its expected student recruitment targets.
The initial FE mergers provoked controversy among politicians who insisted it would damage links with schools. Harrogate Council's Liberal Democrat leader, Phil Willis, said: "It is unthinkable that Harrogate should lose its independence."
He had a change of heart when the merger shifted to one of FE and HE. But the college is likely to have difficulty getting approval from the Further Education Funding Council, which is wary of outright merger as a rescue measure.
Harrogate and Leeds have a history of collaboration, according to Peter Clarke, the principal. "The merger proposal would build on this alliance and also safeguard further education in the area by putting the college, which has accumulated a deficit over several years, on a sound financial footing, " he said.
The college has a deficit of Pounds 1.4 million, but Mr Clarke said the chief driving force was curriculum gain. "There are advantages in having everything from post-16 education all the way up to postgraduate level at the same institution."
The FEFC is not enthusiastic about HEFE mergers as it considers that the colleges would be subsumed by the larger universities and lose their key characteristics.
The Higher Education Funding Council may not be keen on acquiring the college debt, at a time when many universities are seriously underfunded.
The institutions will decide in March whether to proceed. Harrogate has 1,500 full-time and 3,000 part-time students. Leeds Metropolitan, 16 miles away, has 23,000 students, over half of whom study part-time, and an annual budget of Pounds 68 million.
"Sharing our resources and expertise will allow us to be more responsive to local needs," said Mr Clarke. "There will be more opportunities to develop access courses to university and we will be able to provide more HE on this site."
The university is also keen to provide more HE in Harrogate. "There will be economies of scale and more of theirs will come to us," said Malcolm Christie, LMU's director of strategy, planning and registry.
Phil Willis, Harrogate's Liberal Democrat council leader, who had criticised possible mergers between Harrogate and other FE colleges said the proposal was exciting. "I am very pleased it is LMU because they have an enormously strong foundation in vocationally based courses." he said.
"The downside is that the pressure to reduce university costs may mean that some college courses would be marginalised."