However, they warned that some school sixth forms might need help administering the access funds that have now been extended to apply to 16-year-olds.

Julian Gravatt, the registrar of Lewisham College in south London, said:

“It is clear that this is the first major reform of further education student support in at least 10 years.”

The total package of Pounds 183 million will split Pounds 69m in 19992000 and Pounds 114m in 20001.

The key message the Government wanted to impart was that it was “moving towards” a fairer system of student support.

It is also keen to act on a Department for Education and Employment Further Education Funding Council-commissioned report which reveals that more than half of all FE students suffer financial hardship (see charts).

The main changes are:

* access funds extended to 16 to 18-year-olds. This means that schools and sixth-form colleges will have to administer them;

* local education authorities to get help to increase discretionary awards (Pounds 47m for existing FE students, down from Pounds 200m at the start of the decade);

* rules to change - in 2000 - to allow more creative use of funds, such as bulk-buying of travel discounts from local operators.

Mr Blunkett said the newsupport was for students of all ages in colleges, and those over the age of 16 in schools.

The Education Maintenance Allowance pilots, announced in July by Gordon Brown, Chancellor of the Exchequer, will help develop longer-term arrangements for the 16 to 19 age group. The allowances will be targeted at students from low-income families in schools and colleges.

Baroness Blackstone, education minister in the Lords, told Graham Lane of the Local Government Association that the intention was to ensure: “a new national system of student support effective in widening participation and improving retention and achievement.

“We want to test out a number of assumptions and options before deciding what is best longer-term.”

For the next two years arrangements would be kept as simple and flexible as possible.

The student access funds would be targeted separately at those in colleges and at 16-19s in school. “The apportionment of funding between the two access funds will aim to provide equitable treatment for 16-19s wherever they study, ” said the minister.

Mr Lane said the decision to implement a national entitlement scheme for student support was very welcome. “New money has been found and much of the present money spent in this area will now be ring-fenced.”