Sixth forms have been offered a three-year reprieve from a major overhaul of funding that will mean they only receive enough money to provide three A levels per student, it was revealed this week.

But unions have warned that after this transition period, schools and colleges could find themselves without sufficient money for students wanting to study for a higher number of qualifications.

Education secretary Michael Gove has promised that a working group will try to resolve how to fund larger programmes, which could also include the International Baccalaureate and some vocational courses, when the transition period ends.

As TES reported on 22 June (“State pupils could be restricted to three A levels”), from 2013-14, the new 16-19 funding system will be based on a single rate for each student, set at a level to provide 600 hours of teaching a year. The Department for Education disputed the report, saying there would be “no cap on ambition”, but this week schools and colleges said the funding changes - when fully introduced - would not allow them to offer more than three A levels per student.

The majority of entrants to Oxford and Cambridge universities now earn four As at A level, with many earning five, although the universities never require more than three in their offers.

Funding per student will replace the current system, which pays schools and colleges for each qualification taught. Professor Alison Wolf, a government adviser, criticised this system for encouraging institutions to work the system and enter students for large numbers of easy qualifications for financial reasons.

But school and college leaders said the new funding system could lead to important programmes becoming unaffordable. “There is a real fear that schools and colleges that currently deliver large programmes will find it difficult to continue and will have to reduce the number of courses they run,” said Malcolm Trobe, deputy general secretary of the Association of School and College Leaders.

Sixth-form colleges have said they will be particularly at risk. “We think 16-19 education is, per student, the lowest-funded part of the state education system,” said David Igoe, chief executive of the Sixth Form Colleges’ Forum. Students receive only about three-quarters of the funding after 16 that they do for earlier key stages.

Mr Igoe said that, at the moment, sixth-form colleges are increasingly placing students on larger programmes as the only way to attract a “critical mass” of funding to pay for a rounded education and the extracurricular activities that universities expect. Even if it was not necessary to take more than three A levels, state pupils would be put at a disadvantage by limiting other opportunities, such as using the time for an extended project, he added.

Annette Smith, chief executive of the Association for Science Education, said that the new system risked preventing popular subject combinations such as maths, further maths, physics and chemistry. “They would get no more funding to do that than someone studying two or three less academic subjects,” she said. Science subjects could also face losing their 12 per cent funding premium, which funds the cost of practical work.

Under the funding system, schools and colleges will also be required to prepare students without a good pass in GCSE English and maths for retakes, and to include “high-quality, relevant” work experience.

Education secretary Michael Gove told the House of Commons that the current qualification system incentivises easy subjects. “Reform is vital if we are to ensure that all young people are given the best chance of getting good jobs, succeeding in life and continuing their education,” he said.

CASH WITHDRAWALS

From 2013-14, students will be funded at a single rate intended to cover 600 hours of teaching - the equivalent of three A levels or four AS levels.

Funding will also take into account retention rates of students, but success rates, which include how many pass, will no longer be used.

Students without good GCSEs in maths or English will have to retake them, funded through what is now Additional Learner Support.

About a fifth of students studying after 16 do not continue English studies despite lacking a good GCSE, rising to a quarter for maths.