Baroness Helena Kennedy QC, whose Learning Works report on widening participation highlighted the financial obstacles faced by many students, made the appeal at the Association of Colleges conference in Harrogate this week.

The fund, which will bear her name, has a target of #163;250,000. She told delegates that if all the heads and governors of colleges in the country gave their earnings from the last hour of the last day of 1999 it would instantly create Pounds 40,000 which could then be matched by private donations.

Student bursaries, which would amount to Pounds 1,000 each, would provide a stepping stone for people eager to continue with their education but lacking the necessary funds. “Our dreams nurture and sustain us and education for all is a dream of mine,” Lady Kennedy told the conference.

The scheme, which is being co-ordinated by Ann Limb, principal and chief executive of Cambridge Regional College, has already had one beneficiary.

Maria McGee, a single mother, received the first-ever bursary when the scheme was piloted in Milton Keynes earlier this year. The money has enabled her to pay for childcare for her two-year-old son, while she studies for a degree in law and psychology at Nene University College, Northampton.

In an impassioned speech, Lady Kennedy urged the Government to think “radically and creatively” and to give education a central role in its plans for welfare reform. Unemployment benefit could be replaced after six months with a learning allowance for everyone except those caring for young children or the elderly. “That would really bring learning into the heart of the welfare state”, she suggested.