The merger of Gateshead and Newcastle colleges is certain to be seen as a the start of a new phase of mergers in FE. Both principals insist that, despite their enormous success, “energies have been diverted by unnecessary competition”.

In a joint statement, they add: “In the light of government funding constraints, changing customer expectations and the need for investment, the time may be ripe to consolidate the gains achieved over recent years.”

Both have been highly entrepreneurial, building a range of nationally acclaimed initiatives ranging from Learning World - attracting shoppers and workers at the Metro Centre into education - to the Centre for Performing Arts at the Tyne and Wear Theatre.

The new college would command a Pounds 45 million annual budget and would run courses for over 26,000 students. Chris Hughes, Gateshead principal, said: “Strategically, this is the way to go.”

Mike Rowarth, Newcastle principal, saw it as the shape of things to come. “It is a collaborative venture that could point the way ahead for developments in further education in the future.”

Tentative talks between both chairs of college governors this week resulted in a plan to “investigate the feasibility”. If it gets Further Education Funding Council, approval, then merger, could happen by August 1998.

Mr Hughes is likely to emerge as a leading candidate to run the new college as Mr Rowath is to retire, and his deputy, who might have made a bid for directorship, recently left Newcastle to run neighbouring Sunderland.

Mr Hughes has not been afraid to ruffle feathers in his bid to help the college to grow. He crossed swords with the the former Sunderland principal by opening the Washington Business College as an annexe of Gateshead three years ago, in the middle of what was seen as Sunderland’s catchment area.

Learning World was seen as a significant coup, taking the college into the heart of Europe’s biggest shopping mall, in a joint venture with Sunderland University.