Stan Dey is to step down in August as chief executive of Yorkshire Coast College, Scarborough, which is one of more than 50 colleges nationwide operating under a deficit budget. Mr Dey is already absent on sick leave.
Yorkshire Coast College came under the spotlight in 1994 when 42 infants from the staff creche were found to be among the enrolments on a child-care course.
Last year it again hit the headlines after running into severe financial difficulties, and more than 50 staff were made redundant. The college's deficit in 1992-4 was more than Pounds 1.1 million.