Europe's biggest construction training centre is under threat of closure because it cannot afford to refurbish student accommodation.
The National Construction College, which trains 35,000 people a year at its five UK sites, is due to decide next month whether to shut its main centre in Norfolk.
Half of its trainees study at the 480-acre site, which the college says it is the only place in the UK where students can learn how to operate heavy plant or cranes and gain skills in steeplejacking.
The rejection of a planning application to build 250 houses on 20 acres next to the college to fund improvements to the campus have, however, put its future in doubt.
Andy Walder, the college's acting director, said: "Our vision was to have a flagship college in west Norfolk, to build on current facilities and expertise and safeguard jobs. Following the disappointing appeal decision, there is no way at present this vision can be realised.
"At one end of the spectrum is total closure. At the other end, a knight on a white charger comes along and gives us pound;8 million."
The college argues that work for the 2012 Olympic Games in London could he held back by a shortage of skilled construction workers if the facilities were shut.
The centre is at a former RAF base near King's Lynn. Students live on-site and the college says the 50-year-old former barracks are substandard. The pound;15 million refurbishment plans included accommodation for 250 students and new leisure facilities.
The college is about pound;8 million short of its target. It says it has examined all opportunities for funding, from Government grants to its levy on members, but it has not been able to bridge the gap.
Ruth Kelly, the Local Government Secretary, refused the planning application because it was on greenbelt land. The Conservative local authority defended her decision and accused the college of trying to "blackmail" the community into accepting inappropriate building work on a greenfield site.
Jim Dobson, the leader of King's Lynn and West Norfolk Council, said: "What they've been saying is, `if you don't break your planning laws and allow this to go ahead, we will close the college and lose 700 jobs'. That's called blackmail.
"But I take the threat very seriously. Given the economy here, it would cause serious disruption."
He said the council is keen for the college to stay open and to save the jobs. He called on ministers to intervene, arguing that pound;8 million was a relatively small sum for an important national training facility.
"It's as clear as light to me that this debate needs to take place in Westminster, not in King's Lynn."