Bilston Community College announced it was pressing for a judicial review of its budget settlement, while several other big losers in this year’s spending round - including Bishop Auckland College, Halton College and East Durham Community College - are understood to be waiting in the wings.

Papers went to counsel earlier this week, and a date for a court hearing - thought to be the first of its kind - is expected next week.

Bilston principal Keith Wymer says his college has suffered disproportionate cuts and wants his grant restored. He said Bilston’s budget had been cut by about 20 per cent because of the way funding chiefs coped with the loss of budgets for growth earlier this year. By contrast, he said, the average cut was nearer 3 per cent.

The Further Education Funding Council has always maintained that the cut - of Pounds 75m - was administered as fairly as possible.

Mr Wymer, who maintains that 80,000 more people would attend his college if finance was available, said Bilston had not been treated fairly.

He said: “The issue is not one of funding at all. The issue is that we can’t enrol any students who can’t pay for their course after Christmas. We can offer courses all over the world, but we are worried we won’t be able to offer them in Bilston.

“Thousands of people in the community are expecting to continue their courses. We want to provide them with an education.”

The Bilston court action also brings to a head the long-standing feud between low-funded and high-funded colleges.

The FEFC plans to bring all colleges into line within three years.

But principals struggling with low average funding levels say the timetable is simply too long.

Stamford College principal Andrew Middleton, who has led campaigns by low-funded colleges, said anger was increasing. “Since the early summer there has been silence from the FEFC and a promised circular is overdue.”