Ministers have unveiled stricter rules on college mergers, which will force principals to prove the educational benefits of a larger college before they can win approval.
Plans to transfer control of mergers to the Learning and Skills Council have been scrapped with the announcement of the council's abolition in 2010. The powers will remain with John Denham, the Innovation, Universities and Skills Secretary, who has made explicit his concerns that larger colleges are not providing a better education.
Where earlier policies aimed at keeping colleges efficient through competition, they are now being urged to collaborate more. Colleges wishing to merge from September will have to prove they can offer better value for money, increased choice, better participation rates and a high quality of education.
The new merger policy document says: "We are not seeking a reduction in the number of FE corporations in the sector. We do not believe that there is any well-founded evidence in support of large colleges generally.
"Indeed, we are concerned that, in some cases, mergers may actually be detrimental to the interests of learners, employers and communities . reducing choice for learners, and potentially undermining local ownership and accountability."
Peter Tavernor, principal of the Manchester College, which was formed out of further education's largest merger to date (of City College and Manchester College of Arts and Technology), said more thorough examination of the advantages and disadvantages of mergers would be a good thing.
His merger, which was formalised this year, came under an unusual degree of scrutiny due to its size, and took over two years of discussions, and two studies of the potential benefits, to complete.
"Some of the mergers coming forward were more about the egos of principals leading them or, frankly, they were about the retirement plans of some of the college leaders," he said.
"I think where there is strong evidence that better performance will be the result, they will be allowed."
The new rules could make it hard for some institutions to remain viable in the current competitive college environment.
Even a thriving institution such as Warwickshire College has warned that its governors, who include members from companies such as Aston Martin, believe it needs to double its turnover to Pounds 100 million if it is to be secure.
But the policy document defends ministers' commitment to submit merger plans to a "high level of scrutiny and challenge", rejecting suggestions that larger institutions are at an advantage.
It cites a Department for Innovation, Universities and Skills study that found no relationship between college size and success rates or financial health, and which said there was no evidence that merged colleges performed better than others.
The paper does acknowledge a correlation between size and Ofsted inspection success, but says it is "modest". A CfBT Education Trust report found that a college with a Pounds 35 million budget would have an inspection report half a grade better than one with Pounds 5 million.