Colleges need an immediate Pounds 200 million injection just to stand still, further education funding chiefs told MPs this week.

But the cash would do nothing to further Prime Minister Tony Blair’s vision of getting an extra 500,000 people into further and higher education, according to a submission from the Further Education Funding Council.

FEFC officials estimate that the cash is needed simply to maintain student numbers at last year’s level while staving off further cuts in colleges.

The figures form part of the FEFC’s submission to the powerful Commons select committee on education which started a high-level inquiry into FE funding this week.

The inquiry comes as new projections show an unprecedented number of colleges falling into financial trouble. Latest figures show 57 per cent of colleges are either financially vulnerable or weak - up from just 30 per cent of colleges in 1994.

FEFC chief executive Professor David Melville told MPs the situation was “worrying” and could only get worse.

Colleges are currently reeling from the effects of Pounds 100m budget cuts imposed last year. Professor Melville said numbers in FE had fallen for the first time since colleges won their independence.

He told MPs the FEFC was currently developing a strategy to deal with the new spate of college mergers - and was encouraging colleges in urban areas to discuss partnerships and full mergers as a way of rationalising the system.

“We are looking at the most obvious areas and putting the data together. We are encouraging colleges to look at it together,” he said, emphasising that the FEFC had a responsibility to secure education, rather than the future of individual institutions.

He said colleges had responded well to the idea of partnerships to raise participation in education - something proposed by barrister Helena Kennedy in her report on FE, published earlier this year.

Scores of colleges have applied to form pathfinder partnerships, and win special funding to attract more people into college.

He confirmed the assertion from Liberal Democrat education spokesman Don Foster that no body had overall responsibility for planning in further education.

But he said work was already under way to reform the way colleges are funded to give priority to the most underprivileged groups.

He said: “FE is the major contributor to the national targets and it is also the sector which makes good literacy and numeracy deficits left over from schooling. Further education and lifelong learning are synonymous; indeed FE can truly claim to be the only comprehensive platform for lifelong learning. ”

He said it was “a sector whose time must come if the country is to recover its overall competitive edge and move to a socially inclusive society”.

The Association of Colleges this week sent Education and Employment Secretary David Blunkett a demand for Pounds 231m, the amount the association claims colleges need to stay afloat in the next financial year.

AOC chief executive Roger Ward said: “Colleges educate more 16 to 19-year-olds than schools and they train millions of adults wanting to improve their qualifications to get off and stay off benefit. But this year, because of funding cuts we are turning away up to 250,000 students, from 16-year-olds wanting to do A-levels to adults improving their technical qualifications.

“At the moment two-thirds of colleges are trading at a loss and one in five is technically insolvent.”

He said money was needed to meet Government targets to bring more people into education, as well as repairing poor buildings and plug the gap left by the near-disappearance of discretionary grants.