In his response to an official report on the impact of the policy, Bill Rammell, the further education minister, conceded that the end of an automatic right to free English classes had made several providers prepare for fewer students by sacking staff. But he blamed this on a misunderstanding of the policy on English for speakers of other languages.

“We will ensure that communication to providers about the Government’s commitment to Esol is further improved and that this represents an opportunity to expand provision with an additional focus on courses that are employer-centred and paid for rather than cut back,” he said.

The Government announced plans to restrict free Esol classes from August to migrants on benefits. All others would have to pay a third of the cost of lessons. But after an assessment raised concerns about the impact on women, low-paid workers and young people, Mr Rammell revealed he will be softening the blow.

Now, free classes will also be extended to asylum seekers if they have not received a decision on their case after six months, as well as to those who cannot return to their country for reasons beyond their control, such as civil war.

He also made an extra pound;4.6 million available for student hardship funds, which could help with the fees required in the future.

Mr Rammell said funding of English classes had tripled and demand was rising at an “unsustainable” rate, so that some of the most needy were stuck on waiting lists while others who could afford to pay were studying for free.

“The changes we are implementing will ensure that those who are most in need are able to access English language courses. They also ensure that we are extracting maximum value for money from our Esol budget,” he said.

But Ceri Williams, principal of the Mary Ward Centre in London, said the money was not enough to cope with the numbers affected.

A survey at her college of 1,080 students found that one in five were not claiming any benefits even though they were eligible, because they earned less than pound;15,000 a year.

Most Esol students said they could not afford to pay the fees. Among those studying at lower levels, three-quarters said they could not afford the fees.

“Our survey shows that a large group of the most vulnerable low-paid workers will suffer,” she said. “People are being penalised for trying to support themselves. There should be a way to prove low income that doesn’t involve claiming benefit of any kind.”

Colleges should be given targets to attract the most needy students and then left to manage the priorities themselves, she suggested.

Paul Mackney, joint general secretary of the University and College Union, said: “This latest announcement still fails to address the major concerns of professionals critical of these plans. A glaring omission is the continued failure to require employers to make a financial contribution.”