Two-year-old ELWa - Education and Learning Wales - should be reorganised to make it more representative of the split between further and higher education, according to a report published by the Welsh Assembly.
ELWa was set up as an umbrella body representing the Higher Education Funding Council for Wales and the National Council for Education and Training, which funds FE and work-based learning in a similar way to the Learning and Skills Council in England.
The report, by senior assembly official Hugh Rawlings, concluded that ELWa, set up two years ago, was badly constituted.
The present chief executive, Steve Martin, is said to be supportive of the assembly's report, which recommends the split, although it creates uncertainty about his position, along with that of finance director Richard Hirst.
The report recommends two chief executives and two finance directors, reflecting the split.
ELWa never existed as a statutory body and, in the end, the chief executive's role, straddling both FE and HE sectors, became too large.
The changes, expected to be approved by Jane Davidson, the Welsh education minister, in the National Assembly yesterday, will mean a clean split between the two sectors. In England, university funding has always remained separate from the remit of the LSC.
The ELWa "brand" may still be retained as the public face of the National Council for Education and Training, however.