This week 65 senior teachers at one of the country's largest further and higher education colleges were asked to take 20 to 25 per cent pay cuts.
Plans are also under way to recruit future staff on a much lower pay scale. They will be classified as assistant teachers rather than lecturers and employed on a scale of pound;10,000 to pound;17,000 a year.
Both the management and the lecturers' union, NATFHE, say an extremely successful college is being devastated by Government demands for savings.
Norwich is an isolated college - its nearest neighbour is 44 miles away - and its staff turnover is low. The majority of employees are therefore at the top of the pay scales and the college cannot make sweeping redundancies without damaging its academic success.
A management spokesman said: "These are still proposals at the moment and we face them with extreme reluctance. But we have to decide on where to make the savings by the end of the month."
Peter Hutchin, NATFHE branch secretary, said: "We have had excellent relations with management, but they will not now consult further. We do not believe these are the only options open to them."
Norwich, with a staff of 1,150, has invested in a pound;4m building programme. But since the commitments were made, the extra cash for growth from the Further Education Funding Council has been abolished. It was a mechanism which triggered massive expansion over the past two years.
Funding has been capped and the college must make savings of pound;1.5m a year for three years, in line with the FEFC decision to eliminate spending differences in colleges throughout England.
"It is an impossible position the college finds itself in," Mr Hutchin said. "Morale is rock-bottom. I have had people coming to me in tears."
Both sides accept that it is a problem facing the whole of the FE sector but, said Mr Hutchin, "every problem with cuts that could hit a college seems to have hit us".