Talks through the conciliation service ACAS have made significant progress. Both sides are understood to be close to an agreement in principle on writing a maximum number of annual teaching hours into the contract.
Part-timers are to have "fractional" contracts with the abolition of hourly pay rates. The employers are also understood to have offered some concessions, including increased holiday entitlement.
The key to peace now appears to hang on a demand from NATFHE, the college lecturers' union, for a weekly limit on the number of hours worked. The Colleges' Employers' Forum insists this is the one issue on which it will not shift as it would undermine the flexibility colleges need.
Neither side was willing to spell out details of progress made, but both say the need for a settlement is pressing. A year of local negotiations has produced only 35 contracts, around half of which are very close to the CEF model contract.
Meanwhile, disaffection has grown on both sides, with a constant trickle of lecturers over to the CEF contracts and increasing frustration among managers over the lack of a national settlement.
Leaders of NATFHE are likely to face criticism from members at the union's annual conference in Torquay later this month for failing to reach a national agreement. Thousands of redundancies nationwide have put pressure on staff to increase their workloads.
Pressure will mount with the Government's decision to withhold up to Pounds 50 million in grants from colleges which fail to agree new contracts by June. Also, the provisional budgets for 1995-96 published by the Further Education Funding Council last week show that many colleges will be squeezed next year.
John Akker, NATFHE general secretary, told The TES that peace could not be at any price. "It is in the whole sector's best interests that a reasonable deal is made giving people protection against unrealistic workloads," he said.
Equally, the employers want a settlement. The CEF will face similar criticisms from chairs and principals at 360 regional meetings on the contracts at the end of this month.
Roger Ward, CEF chief executive, said: "I am optimistic that the (ACAS) talks will produce a settlement that will be acceptable to all parties. There is a pressing need to reach a settlement quickly."
Leaders of NATFHE decided that strikes, other industrial action and talks on local contracts would continue despite the ACAS talks. Closures and serious disruption were expected at one in 10 colleges as The TES went to press.
More than 800 staff brought work at Sheffield College - the largest college in Europe - to a virtual standstill. They were striking over management's decision to withhold the 2.9 per cent 1994 pay rise from staff who refused to sign contracts. Staff say it would mean a 15 per cent increase in the maximum number of teaching hours.