SHEFFIELD, the second-largest college in the country, will have two governors imposed upon it, and faces a six-month review of the way it is run.
Principal Ken Ruddiman, 60, is due to retire on December 31 and left the college on Friday.
The imposition of governors by the Further Education Funding Council - the first time it has used its new powers - shows that it is prepared to be tough in David Blunkett's own back yard. The Education and Employment Secretary's constituency is in Sheffield Brightside. He is known to be very supportive of the FEFC's decision.
The review is being seen as something that could be of significance for other parts of the sector - watch out, the FEFC is about.
Sheffield's problem has been in over-stretching itself with distance (off site) franchising. After MPs on the public accounts committee criticised the serious risks involved in franchising, the FEFC tightened its control.
In September a new pound;2.5 million centre, Crystal Peaks, opened to serve the south east of Sheffield. It has been designed to allow for future expansion.
The college is in category C, which means it is in poor financial health, and is listed as requiring exceptional support.
It has 45,000 students (77,000 enrolments), 1,800 staff, five main sites and 60 community centres.
Last year's turnover was pound;42.5m. But the actual surplus was only pound;13,000, and the most recent 9899 figures go to the governing body today.
As well as the principal retiring, three of the four directors left last month to take up other jobs. One went to the British Museum and another to the University of the South Pacific in Fiji.
George Sweeney, principal of Knowsley College, has been appointed acting principal for the six-month review. He is among a small group of principals known to have the confidence of Mr Blunkett.
Terry Melia, chair of the Further Education Development Agency, will oversee the review. Bob Fryer, director of the University for Industry, and formerly principal of the Northern College, is one of two governors to be imposed.
Alan Biggin, the college's marketing manager, said: "We had been operating with many national companies but clearly we will be coming out of distance franchising and developing an (alternative) strategy for growth." He said they had met 90 per cent of their targets last year.
"With no principal in post, with an inspection coming up and others going, this makes us quite vulnerable and the potential for damage is colossal.
"You would have to stand in Leeds to see all of the college, it is enormous."
He denied the college had a serious problem with its student returns. "With so many enrolments I would be a fool to say that everything goes through smoothly. I would be amazed if any college said its returns went through smoothly."
Michael Entract, chair of the governing body, said: "The college is fully supportive of these developments. The Sheffield college is one of the largest in the country and the governing body wants to make sure it remains at the forefront of education delivery. The board is keen to work closely with the FEFC and our new acting principal."
A ballot of lecturing staff over the introduction of instructor posts has now been postponed.