Wally Brown, principal of Liverpool community college, has just had to break the bad news.

A community group from the deprived Kensington area of the city, a jungle of boarded-up homes and permanently shuttered shops that is a world away from its London namesake, has been told it will lose its funding.

Not only will the classes end, but its community centre could have to close without the college’s contribution to the rent.

Mr Brown said: “The area they live in is one of the Government’s priority regeneration areas. There are millions going in as special grants and at the same time they’re taking mainstream funding out.

“Whoever advised central government has missed by a mile the implications of what they’re doing in Liverpool, Manchester, in all the big cities.”

The cuts, which could see 300,000 adult places disappear across the country, were a particularly bitter blow for the college.

They were announced just as the Office for Standards in Education rated the college as outstanding, particularly for its efforts to bring adults back into education and to promote regeneration.

Its budget for adult education was due to shrink by pound;1.5 million.

That would have meant reducing adult learners by 3,000, or 15 per cent. But a plea to the local and regional Learning and Skills Council offices won them a reprieve and only pound;276,000 - or 500 places - will be cut this year.

Worse news is expected next year, with more cuts for the adult sector, as demand for places for 16 to 19-year-olds continues to rise.

If funding is cut further, it will threaten the college’s 19 drop-in study centres in community centres and libraries, where adults are reintroduced to education.

The library in Walton is silent and nearly empty, but open the door to the drop-in study centre, and there is a hive of activity. Dozens of students of all ages are working on computers or at tables studying English and maths.

Christine Laverty, 77, left school at 14 with no qualifications. She has just sat her English GCSE.

Like many in the study centre, she said it was the leisure courses derided by the Government, such as embroidery, which brought her back into education.

Maureen Mellor, vice-principal in charge of the curriculum, said the Government was wrong to characterise these as merely leisure pursuits.

“The Government has got this idea that it’s all about middle-class people getting for free what they should be paying for,” she said. “We don’t run chess courses or a bridge club.

“With a significant number of adult students, you can’t just go bringing them into level 1 (below GCSE grade A-C). They’ve got no aspiration for learning. We’ve got to hook them back in.

“Some of them have got two or three generations of unemployment and no good experiences of learning at school.

“Even the softer courses have an assessment of literacy and numeracy built in. We are already addressing that before the student realises what’s happening.”

She tells the story of one man who took up a local history course. It inspired him to start helping his grandson with his homework, and he now volunteers as an assistant in his local primary school. “That course is under threat,” she said.

Many of the other entry-level courses which lead students into national qualifications, such as introductory Spanish or speaking with confidence, are also under threat. The college is trying to save them by getting them accredited.

But the suggestion that adults should pay for these courses has fallen flat in Liverpool, where the college says 80 per cent of its students are from deprived areas.

Mr Brown said the Government is unintentionally taking from poor, inner-city areas to fund the wealthier suburbs.

Because money is being taken from the adult education budget to pay for places for 16 to 19-year-olds, sixth-form colleges, often in wealthier areas, have an advantage, he said. He added: “If you look in 10 years’ time at where the funding will be, it will be with the sixth-form colleges.”

Mr Brown said it was a strange way to reward colleges for attracting more young students.

“We used to get paid in piecework,” the former engineering apprentice said.

“You couldn’t say to someone, ‘You’ve done better than we thought, so we can’t pay you.’ There’d be a strike.

“If colleges hadn’t been so successful, we wouldn’t have any problems. The more you think about it, the more it’s a bloody mess.”