The axe is expected to fall on courses for thousands of students because colleges say they have been left short-changed by the further education funding quango.
Colleges say widespread cuts are already being made to basic skills courses. As FE Focus went to press, they were discovering that funding from the Learning and Skills Council for 2005-06 will be tighter than expected.
The Association of Colleges is still analysing local funding settlements, but colleges have told FE Focus they have had to go back to reconsider which courses they can afford to run from September.
An independent inquiry into adult education commissioned by Niace, the national organisation for adult learning, shows that courses vital to government targets are already being axed.
They include schemes for students with learning difficulties and disabilities, which the LSC has a legal obligation to provide.
Summer schools offering basic skills, designed to widen inclusion and attract adults back to college, have already been abandoned this year as colleges struggle to save up to pound;3 million each.
David Gibson, the former AoC chief executive brought in as a trouble-shooting principal at People's college, Nottingham, said: "We were led to believe there would be a transparent process, done in consultation.
We now find ourselves with pound;500,000 less than expected. Principals should not take responsibility for this."
Mr Gibson said the college was expecting its budget to increase from Pounds 11.6m to 12.2m. Instead, he has been left with pound;11.9m, leaving the prospect of cuts in courses and redundancies.
A principal who expected a 5 per cent funding increase based on previous LSC guidance, has been told he will get 1 per cent. He predicts he will have to scrap all adult part-time education in the next two years. It will mean the loss of most of the college's students.
He told FE Focus: "All the work done over the past 10 years to build up adult education will be reversed within two years."
The principal of one of England's largest colleges told the Niace inquiry:
"We have no option. Adult education will save us pound;1m (in adult special needs). It is the legal duty of the LSC to provide, not the colleges."
The inquiry, chaired by Chris Hughes, former chief executive of the Learning and Skills Development Agency, is looking at the current demand for adult education, long-term trends, successful schemes to widen participation and the concerns of colleges.
Three factors are pushing colleges to the brink of crisis, according to the evidence seen by FE Focus. First, the Government has pledged too little money for the next three years to meet adult education needs and the demands of more than 500,000 16 to 18-year-olds in colleges.
Second, the LSC has scaled down cash for colleges in line with past performance rather than future demand. Third, the inquiry reveals that more than 70 per cent of adult education in colleges has been classified as "other" or non-essential spending, including everything from IT, food science and health and safety training.
Mr Hughes said: "This is nearly three-quarters of adult education, so cuts must go beyond hobby-type provision. It includes courses that are steps to level 2 (GCSE-equivalent) work - the cornerstone of the Government's learning and skills policy."
LSC strategy director Rob Wye said colleges could protect high-priority courses by reducing other adult programmes or raising fees.