Last month, figures published by the council showed that the number of FE students had fallen for the second year in a row - the first time this has happened in two decades.
There was an overall drop of 0.3 per cent last year - a severe blow to government plans for a 700,000 increase by 2002. The number of council-funded students could drop below three million - to the 1995-96 level.
Now a draft circular from the council proposes that the threshold for funding eligibility should be reduced from nine hours to three for some courses. With each three-hour course counting as an enrolment it will dramatically boost recruitment figures.
One college principal said: "This looks suspiciously like the kind of tactics that colleges were not so long ago told were beyond the pale.
"Short courses, which had been ruled ineligible, are now encouraged again. It is a complete U-turn and not much of a coherent strategy to widen participation"
Eligibility for funding will be extended to include: courses of three guided learning hours for basic skills; introductory courses of three hours for information and communications technology, six-hour courses for adult learning and employment skills, including courses for family learning; and short return-to-learn courses. Most of the courses will be eligible for funding from May 1, and all will be eligible from August.
The council will undertake "an initial survey on the effectiveness of this approach in widening participation and increasing student numbers during 2000 01".
John Brennan, director of development at the Association of Colleges, said: "The Department for Education and Employment is desperately worried about the way things are going and that targets will be missed.
"Colleges have got lots of opportunities to do something about it so I would not be too pessimistic.
"The Government should decide what it wants: growth as an end in itself or targeting specific groups such the disadvantaged. You cannot deliver both at the same time."