James Mathiason had only learned to travel on the London Underground a year before the suicide bombers attacked.

The 21-year-old, who is autistic, had gained the skills to manage his anxiety and travel independently at the Interact centre in west London, where he was heading on the morning of July 7.

When the bomb exploded in his carriage, at Edgware Road station, his family insists it was this training which helped him to keep calm and ask for help in getting to safety.

But in just two weeks’ time, the centre, which his family believes helped save his life, faces closure after it was branded inadequate by the Office for Standards in Education.

It was a decision which shocked staff, students and parents. The specialist college had been rated outstanding in 1999 under an earlier inspection regime.

Barry Mathiason, James’s father, said: “We are so proud of the way he used what he had learned. It must be difficult for anybody to cope in that situation, let alone somebody with his problems. When I heard about the explosions, it was hell. He was very traumatised.”

In emergencies, James was taught to tell another adult that he is autistic and ask for help. It worked. Another passenger, Caroline Bridgman, reassured him and led him to safety. He was afraid he had blood on him, that he was going to die, and that he had left his bag behind.

James is now recovering at home in north London, after suffering a burst eardrum and minor burns in the explosion which killed six people.

The future of the college is less bright. It has 18 students, most of whom are referred from mainstream schools after a statutory assessment of their needs, before going on to FE colleges.

They follow a course specifically designed for people with Asperger’s syndrome and accredited by the National Autistic Society.

Students learn how to manage life outside school and college, and to deal with new situations, people and events.

The inspectors praised this teaching of life skills, which the centre says is its sole reason for existence.

The college also accepts some of Ofsted’s criticisms and is prepared to take advice on improving the use of data to monitor students’ performance.

But parts of the report are factually incorrect. It places the centre on the wrong floor of its building, gets the length of the college day wrong and describes a student with severe learning difficulties who simply does not exist.

More seriously, it makes a lengthy criticism of the provision of literacy and numeracy, which centre staff say is only an incidental part of their work.

Many students have level two qualifications and do not need to work on basic skills, as the inspectors admitted.

The report also agreed that literacy and numeracy was integrated into all aspects of the curriculum.

But it concluded: “There is insufficient focus on literacy and numeracy.”

James Graham, the centre’s principal and founder, said: “Ofsted has inspected provision which doesn’t exist. We would have to introduce a whole new area of provision that would dilute what we are offering.

“It takes an enormous amount of real classroom time to get a student like James out on his own, travelling across London. He was a one-to-one student at school.

“The level of effort needed to instil that confidence to do things he never thought possible before would go completely by the wayside if we had to teach literacy and numeracy as well.”

Mr Graham says he cannot produce an action plan that will satisfy the Learning and Skills Council without introducing a whole new area of provision and diverting the college from its sole purpose, .

Funding for new students will stop on August 8 and the centre will no longer be financially viable.

Peter Pledger, executive director for the London West LSC, confirmed it did not require the centre to provide separate literacy and numeracy provision but, he said, its contract means the centre must meet Ofsted’s requirements.

He said: “We have never said we will refuse funding. We expect all colleges that receive a poor inspection to produce an action plan and to start implementing that to the satisfaction of inspectors.

“It’s not the role of the LSC to judge Ofsted.”

In a letter to the college, Ofsted agreed students did not attend to learn English and maths. Christine Steadman, acting head of post-compulsory education, told the college that inspectors were obliged to make judgments about the provision anyway.

An Ofsted spokeswoman said complaints about the facts and judgments in the report were investigated but were not upheld. The centre was inspected according to the accepted framework, she said.

However, the framework makes it clear that inspectors are not obliged to inspect literacy and numeracy where it is not relevant to students’ main programme of study.

The judgements about basic skills contributed to the inspectors’ conclusion that the college did not provide good value for money.

The centre admits that the costs are high, at around pound;30,000 a year for each student, but Mr Graham says the alternatives to the services it provides are worse.

He said the travel costs for one student who has to travel from Hertfordshire came to pound;50,000 before he was taught to use public transport, and residential centres can cost pound;60,000.

“They’re quite prepared to fund colleges that continue to be inadequate as long as they keep producing post-inspection action plans,” he said.