New powers personally backed by Chancellor Gordon Brown will allow funding chiefs to sack principals and replace college governing bodies.
The powers are spelled out in the further education white paper published this week Bill Rammell, further and higher education minister, said at the launch of the paper that such tough action by the Learning and Skills Council would be taken not only against failing colleges but also those judged "persistently coasting".
The plan is part of a pound;67 million package of proposals to raise standards and make FE more responsive to employers and students. They include leadership courses for all new principals and continuous retraining for lecturers and managers. There will also be grants to recruit new "excellent" lecturers with industry skills.
New grants for adults will allow anyone under 25 to study A-levels for free and an expansion of the Adult Learning Grant for those struggling to meet the costs of education and training.
Competition will be opened up with the creation of new sixth-form schools and colleges and more scope for private training providers to bid for LSC cash.
Struggling colleges will be urged to join "trusts" and "federations"
involving schools, universities or not-for-profit training companies. Mr Rammell said more competition was vital.
He said: "We are talking about new providers, not wholesale privatisation.
But where performance is unacceptable, we are looking to other providers to help drive up standards."
The white paper defines "coasting" as a college where Ofsted says provision is "satisfactory but not improving".
While only eight colleges (2 per cent) were judged by inspectors to be inadequate, 50 were reckoned to be coasting with some poor courses.
Colleges will be given a year to improve before radical action is taken.
Rob Wye, LSC director of strategy and communications, told FE Focus the council would be making these "interventions" from spring 2007.
He said: "We cannot leave it to chance whether or not people have a good college."
However, he promised a more "robust" definition of coasting before action was taken. "We need to firm up our definitions to get it right," he said.
"This is going to mean a very tight timetable."
Colleges have responded sceptically to the new powers - which effectively remove the right of appeal to the Secretary of State over changes imposed by the LSC.
John Brennan, chief executive of the Association of Colleges, broadly welcomed the white paper but said: "If you transfer powers to the LSC, not only do you risk them abusing it but you take away a layer of scrutiny and the right to be heard by another authority."
The paper, Further Education: Raising Skills, Improving Life Chances implements 76 of 80 recommendations in the recent Foster review of the future of FE - these aim to cut bureaucracy, improve the sector's reputation, increase the number of sixth form colleges and get more general colleges to specialise.
Much of what the white paper recommends is already happening, including an increased role for FE colleges teaching higher education locally and greater freedom from scrutiny for high performing colleges.
Nick Pearce 4 Comment 4 Sixth-form colleges, TES 15