The scheme was proposed by David Hart, general secretary of the National Association of Head Teachers, speaking in Newcastle upon Tyne at the annual conference of the Association of Principals of Colleges last week.
The national council would draw up a code of conduct for student recruitment, and area boards would be set up to oversee local 14 to 19 curriculum planning and ensure careers guidance was impartial.
Relations between schools and colleges have reached an all-time low in many parts of the country since former Education Secretary John Patten approved new statutory arrangements for schools to open new sixth forms.
Discontent has been fuelled by survey evidence showing a sharp increase in ministerial approval of small sixth forms - which many in both schools and colleges consider unviable - and the prospect of learning credits, or vouchers, for students to spend on education and training where they choose.
Debate on future collaboration was heightened at the conference by political developments. Both Labour and the Conservatives have plans to end the differences in funding between schools and colleges.
Shadow education spokesman David Blunkett unveiled more of his party's plans for further and higher education when he addressed the APC conference. He promised equity of funding and more efficient use of resources and called for closer collaboration with schools and colleges sharing staff.
While he is personally committed to tertiary colleges, he warned that sixth-forms would not disappear and he demanded co-operation between both sectors.
Schools will also be under pressure to collaborate with colleges as the Government plans to cut the higher levels of funding they receive and introduce a large element of payment by results and rewards for students finishing their course. A scheme planned by Welsh Secretary John Redwood for the 22 new unitary authorities in the principality is seen by many as a trial for the rest of the country.
He is expected to make a decision by the end of this month on the management of schools under the new authorities which start operating next year. Welsh Office proposals say ministers want funding along FE college lines reflected in local management of school schemes for sixth-form pupils.
Welsh heads are furious, describing the moves as "an unmitigated disaster" which would lead to schools rejecting low attainers and likely drop-outs.
The failure of the Government to give clear criteria either for post-16 spending in schools or for the approval of new sixth forms was a big barrier to co-operation, principals at the APC conference said.
Mike Snell, principal of Brockenhurst College, carries out regular surveys for the leading college management organisation. The latest study on the catchment areas of 200 colleges suggested that the uncertainties in Government policy led to a major FE planning blight.
Out of 100 applications since February 1994, only 20 had been rejected and the average size of those approved was well below the recommended 150. The monitoring of sixth forms was also inadequate, he said. "Many schools are offering a post-16 curriculum without formal application or approval." He has discussed his findings with the National Audit Office and called for an inquiry.
David Eade, principal of Barnsley College, said: "We have accepted all the forceful arguments made about the need for efficiency and the need to drive down costs. We are convincing our staff that they have to go along with these things. Yet they can see in other parts of the service that it is of no importance whatsoever. It is damaging to morale."
Mr Hart surprised the conference by expressing some sympathy. "I too have doubts about small sixth forms. Representing 60 per cent of schools with sixth forms, I recognise that I walk on eggshells." His concern was over the Government's failure to see the need for planning. "Planning is not a dirty word. There has to be 16 to 19 planning or we are heading to the precipice in terms of the needs of 16-plus students," he said.
Nor had ministers garnered the evidence to back their policies. "What has happened about the HM inspectors' rubric that sixth forms should be a minimum size of 150 or thereabouts if they are deemed to be viable? Is there a standard by which the DFE is working or is it a case of suck it and see?"
Many of the very sixth forms recently approved by ministers would be killed off if the Redwood proposals were applied nationwide. It will be with LEAs to decide which factors to include in the LMS schemes in the first instance, but with his right of veto on budgets, Mr Redwood would be able to intervene.
Mr Hart described the report as "one of the most radical documents produced by the Welsh Office in the past few months". It was potentially of great significance to the debate on learning credits which "show the need for schools and colleges to get their act together".
Tony Coulton, president of the APC, said the APC would look with urgency at helping form a council. "Links between us and LEAs are still important. We really do need a code of conduct which we share with heads in schools."