Minutes for the LSC’s November council meeting initially claimed that decisions on capital had to be postponed because of lack of time to discuss them. But at the next meeting, the council asked for a correction, explaining the real reason was concern over long-term affordability, the Commons was told.

Launching an Opposition debate about further education funding, David Willetts, shadow skills secretary, said: “The problem reached the stage that the minute-taking in the LSC was deceitful in that it was not willing to acknowledge the capital problem. That is why there was a failure of management in the capital project. At no stage was anyone openly reporting between the LSC and the Department for Innovation, Universities and Skills or between Dius officials and ministers about what was happening.”

Chris Banks, the LSC chairman, denied anyone had been deceived, saying the incorrect record was circulated only internally. A summary of the corrected minutes was published in February after the crisis became public.

Asked how an incorrect reason for postponing decisions on capital projects had appeared in records, Mr Banks said: “I can’t comment.”

The innovation, universities, science and skills select committee’s review this week of the crisis also found the most dramatic example yet of the LSC inflating a college’s building plans. John Blake, principal of Sussex Downs College, said regional officials had encouraged his Pounds 8 million refurbishment to become a Pounds 175m rebuild, arguing it was a “once in a lifetime opportunity”.