Fresh proposals have been submitted to form a new college after initial plans to merge two colleges and several school sixth forms were turned down.
But the second submission has also been opposed by Bexhill sixth form college, even though it appears to have won its fight to remain independent.
Karen Hucker, Bexhill's principal, fears that even the watered-down plan for the town will have a significant effect on its own student numbers and the courses it will be able to offer.
Jacqui Smith, the schools minister, rejected the first proposal to merge Ms Hucker's college with Hastings college of art and technology. Ms Hucker is concerned that the new college will be offering 300 more student places than currently provided by the school sixth forms it is replacing.
"This has to mean that students will come from other providers currently offering this provision," she said. "There is a risk that this will affect the synergy and range of provision in other providers such as Bexhill college and be to the detriment of student choice."
Staff, students and parents at her college mounted a campaign again the first proposal, which involved the closure of the college. Two of the six school sixth forms facing closure also objected.
The Learning and Skills Council's south-east region had spent three years on a plan to address low participation and achievement rates in the Hastings and Rother area. But the schools minister ordered the LSC to rethink.
Last month officials submitted new plans, under which a new pound;60 million college will still be constructed in Hastings, but three of the institutions they wanted included in the merger will stay separate.
Henry Ball, regional director of the LSC in the South-east, said: "The shared sense of disappointment in August has given way to a renewed optimism for the future of post-16 education and training.
"We believe we now have a viable framework for improving the future prospects of young people and adult learners in Hastings and Rother."