Mr Blunkett is expected to announce a cash injection of at least pound;600 million for 2001-2002 - the third year of the Government's comprehensive spending review settlement - when he addresses the annual conference of the Association of Colleges in Harrogate.
Much of the cash will be used to recruit some of the 160,000 16 to 18-year-olds who have quit all education and training and are jobless.
Help will also be given to raise college spending levels to that of school sixth-forms. Currently colleges spend an estimated pound;1,500 a year less on a student taking three A-levels than schools. The cash will prepare the ground for the major reforms proposed in a Learning and Skills Bill. Legislation will be unveiled in the Queen's Speech, a week before Mr Blunkett's AOC speech.
The conference has become for colleges what the North of England education conference was for schools in the 1980s - the forum for government to make major spending announcements.
Government sources told The TES that Mr Blunkett would be a "considerable beneficiary" from Chancellor Gordon Brown's war chest in the run-up to the next general election. The rise would be a "significant increase" on the 8 per cent secured for the coming year.
FE Focus pull-out, I Leader, 20