But expansion would be fuelled by employers' and individuals' investment in their own skills.
Campaigning in the villages of his safe Cambridgeshire South East seat, Mr Paice said colleges' success in meeting five-year expansion targets two years early had forced ministers to cap spending. He added public funding for FE would continue and insisted there would be no cuts.
He said: "I see the whole FE sector continuing to expand almost ad finitum. We have seen huge expansion in the 16-19 sector and I think that is beginning to plateau.
"But the expansion in adult learning is barely beginning. We have seen tremendous growth. But it's growth from a very small beginning, so you can have growth of that sort for a long time to come.
"More and more employers are realising the need to invest and upgrade the skills of their staff. It's going to go on because of the entrepreneurial attitude of colleges towards building links with business rather than expanding purely out of funding from the tax-payer.
"Employees are also becoming increasingly aware of the need to maintain and upgrade their own skills. I think we will see a significant expansion of individually initiated and funded training."
Mr Paice signalled the Government's approval of the new breed of super-colleges developing as national training outfits, repeating his assertion that college franchising would stay.
He said the success of the Investors in People initiative as well as career development loans and the entitlement to training for 16 to 21-year-olds in the learning credits scheme would help foster a culture of training and learning in society.
And he dismissed Labour's Welfare to Work proposal as a "complete con trick on young people", refuting the idea that a one-off levy like the windfall tax would wipe out youth unemployment.
Mr Paice argued instead that current trends in education and training would continue to produce expansion and help meet the needs of the British economy.
He said: "The more we can instil the idea of going on learning the more we are going to develop. It's a cultural process that we hope to promote through a whole range of initiatives like Investors in People, learning credits and career development loans.
"The Government is continuing and will continue to fund FE at a very significant level. There must be no suggestion that the Government is going to withdraw from it.
"But I do see much of the expansion coming from a greater awareness from employers of the need to invest - witness the huge development of Investors in People.
"A quarter of the workforce is now employed by businesses accredited or registered as Investors in People. That demonstrates that employers are much more aware of their responsibilities."
Training and enterprise councils would retain their central role in local planning. But FE colleges would move at different rates, with Mr Paice predicting more mergers, while stressing that colleges themselves would continue to be masters of their own fate.
Mr Paice said the entitlement to training up to the equivalent of national vocational qualification level three represented "a very considerable expansion of present commitments."
He said: "One has to be realistic. We cannot turn round to the Treasury and expect them to find taxpayers' money for expansion beyond that.
"As we see learning credits working their way through the system we will see more and more people wanting learning and realising the benefits and building on them."