Campaign by lecturers' leaders helps bring review of free English courses for immigrants.
Foreigners who intend to stay in the country long-term deserve the lion's share of funding for English lessons, say government ministers.
Controversy has surrounded money for English for speakers of other languages (Esol) after Bill Rammell, the further and higher education minister, admitted in 2006 that resources were not sufficient to cover the full cost such was the demand for these courses.
The decision was then taken to reduce universal funding for free Esol. Student numbers were reckoned to have dropped by thousands as a result of the introduction of fees - free classes were restricted to those on benefit or who qualify for tax credits.
John Denham, Secretary of State for Skills, Innovation and Universities, has announced the change of heart which could see free tuition introduced for many of those losing out under the current regime.
"The Government is committed to promoting community cohesion and integration and good English language skills have a vital role to play," said Mr Denham.
"Since 2001, spending on Esol has trebled and over two million people have been helped to improve their language skills.
"Recent reforms are already ensuring that those who can afford to pay for English classes do so and we are encouraging employers to take more responsibility for funding training for economic migrants in their workforces. Now we must go further and ensure that the priority is to reach long-term residents for whom poor English is a real barrier to integration."
The rethink comes after months of campaigning by lecturers' leaders alongside organisations including the Workers' Educational Association, the Refugee Council and the Niace, the adult education organisation.
FE Focus revealed in September that colleges were reporting Esol numbers down by as much as half - although they were holding up in some of the poorest areas where students were more likely to qualify for the limited free tuition still available.
Research published by the University and College Union in November suggested there was continuing evidence that Esol numbers had been hit hard around the country.
Andrew Potts, of Tyne Metropolitan College, one of many lecturers contacted by researchers, said: "Of 72 students enquiring about courses who were told they had to pay fees, only 13 have enrolled. Thirty-two returning students who had fees remitted last year are now liable for fees, but only four have re-enrolled. Forty students have turned up to enrol and gone away when told they had to pay fees."
There was a reported drop from 300 places filled to 130 at Great Yarmouth College.
Sally Hunt, general secretary of the University and College Union, said: "We welcome this fresh look at Esol. We have been seeking such a review and we shall participate fully. We have consistently warned that bringing in fees for Esol would hit vulnerable people and jeopardise community cohesion.
"The Government, quite rightly, has cited community cohesion as a central plank of building a fairer and more equitable Britain and this review appears intended to take account of that.
"The funding must be found to ensure the most needy and vulnerable in society are not further marginalised through an inability to afford to learn to speak the language of this country.
"The government must also look afresh at ways of making employers pay their share of the language training costs of employees."
Leading article, page 4.