Legal action is set to be launched on behalf of students who believe their two-year contracts for study have been breached by the decision to axe the education maintenance allowance (EMA).
The Save EMA campaign is receiving advice from trade union lawyers who are examining whether they can win payments for students who began courses in September expecting two years of financial support.
Students sign an EMA contract which commits them to rules on attendance, punctuality and achievement in return for the payments, prompting the claim that the Government may be obliged to fulfil its part of the bargain for around 300,000 students.
James Mills, a former EMA recipient who founded the campaign and now works as a researcher for a Labour MP, said that following the parliamentary defeat last week, the focus was now on a legal challenge to the Government's decision to axe the pound;30-a-week grant.
He said: "David Cameron went to a few colleges and said, `We won't scrap EMA.' There was a clear promise that EMA won't be axed and students joined their courses on that basis and committed themselves for two years.
"We're saying, `A deal's a deal.' These people have signed a contract and the Government should honour it. Ministers like to bang on about taking a 10 per cent pay cut, but these kids are taking a 100 per cent cut in their income.
"What sort of example is it to set to young people if the Government is tearing up contracts and breaking promises? This is their only experience of politics so far."
Mr Mills said nothing changed in public finances between June and October last year, but ministers allowed students to sign up for courses expecting EMA payments and only cut them after enrolment.
The National Union of Students has also been appealing to its membership for copies of their college learning agreements and EMA contracts to try to bolster the case.
But it has found that the introduction of separate AS and A2 exams may hinder its case for students on A-level courses, so any test case is likely to focus on students on vocational courses which are more explicitly a two-year commitment.
Conservatives have branded Labour support for the EMA opportunistic, pointing out that while in Government the party proposed a "restructure" of the allowance in 2013, when the raised participation age would begin to be enforced.
Schools minister Nick Gibb said: "Labour needs to accept the responsibility for the state of the public finances and take a less opportunistic approach to opposition."
As education secretary at the time of the proposed restructure, however, Labour's Alan Johnson stressed it would not be a cost-cutting exercise, while the Coalition proposes cuts of hundreds of millions of pounds.
A spokeswoman for the Department for Education said it had not yet received any legal challenge, but declined to comment further.
- Original headline: Legal action mooted over EMA `breach of contract'