Acting principal John Bolton said that the board was doing “the honourable thing” by standing down in advance of government requirements on the composition of governing bodies which come into effect in August.

But he refused to confirm whether the reports of the National Audit Office and Further Education Funding Council - both to be published on April 15 - specifically criticised the role of governors.

All but one governor - a staff representative appointed in November - are likely to stand down in July and a new board will be constituted after consultation with local interest groups.

The present board comprises eight business members, two co-opted members, one staff representative, one training and enterprise council representative and the principal - and six vacancies.

The new board, in line with the model proposed in the Government’s Accountability in FE document, will be made up of seven business governors, three community and three staff or parent governors, two co-opted, two local authority and two staff governors, and the principal, with no TEC representation.

Mr Bolton said the board wanted the investigation and its outcomes resolved so that the new board can concentrate on taking the college forward rather than reflecting on the past.

He added that a panel of observers, including representatives from unions, the local council and community would ensure that the process of transition and election of a new board would be as “open and transparent” as possible.

The call for more accountability was echoed this week by members of the House of Commons public administration select committee who criticised college governing bodies as undemocratic.

Helen Jones MP said: “There is no way at the moment that anyone in the local community can influence the decisions of the college boards.”

David Gibson, the chief executive of the Association of Colleges was unable to defend the fact that most board members are unelected and that, according to AoC figures, only 5 per cent of governors were community representatives.

He said: “It would be foolish to pretend that 5 per cent is not a low figure.” But he added that the proposed changes would mean that more elected representatives of students and staff - as well as councillors - would be able to become governors and boost accountability.

The FEFC launched its investigation into Halton last May after receiving complaints concerning the financial management of the college. The allegations centred on false claims for course funding, breach of the college’s financial guidelines in the purchase of information technology equipment, use of public money to set up a private company and a pound;250,000 refit of the principal’s office suite.

Last month, Halton announced that 147 people were to be made redundant and a further 30 jobs would go through natural wastage. The FEFC has already begun clawing back overpayments thought to exceed pound;10 million.

Principal Martin Jenkins and deputy principal Jenny Dolphin, suspended on full pay soon after the allegations were made public, deny the claims. A disciplinary committee at the college meets next month to decide whether or not to proceed with disciplinary charges against them.