A controversial training company which had its contracts cancelled by colleges due to “irregularities” is to close, FE Focus understands.

Luis Michael Training, set up in July 2009 by former Welsh international footballer Mark Aizlewood, had contracts with three FE colleges to provide sports apprenticeships.

But Sparsholt College in Hampshire - which had a pound;4.2 million contract with the firm to provide almost 1,200 places for apprentices at several football clubs, including League One side Sheffield Wednesday - and Barnet and South Thames colleges in London all pulled the plug.

Sparsholt blamed unspecified “irregularities”, while Barnet claimed its contract “didn’t live up to expectations”.

The Skills Funding Agency (SFA) said it was working with the colleges to protect learners and public funds.

In May, a spokesman for Luis Michael Training said the company was “considering taking action against all of those colleges that have terminated”.

But it has now emerged that the company is to fold.

Co-director Paul Sugrue told the Daily Mirror: “The whole scheme is finished; Luis Michael will go out of business.

“What killed us was that no college then paid us any money. That meant the football clubs never got paid, the kids never got paid and the whole thing descended into a nightmare.”

Mr Sugrue described the company as “totally transparent”, adding: “The opportunity has been lost. I feel very sorry for the people who did not complete their apprenticeships but also very bitter towards the colleges and very sorry for the staff who we’ve made redundant. We’ve left some of them in the lurch because we’ve had no money.”

Chris Martin, one of Luis Michael Training’s directors, said more than 40 staff had been made redundant, and the financial issues facing the company had “escalated into something extraordinary”.

He added: “One of the colleges thinks we owe them money, which we don’t have, and we don’t have the money to fight it.

“We have always had a very good relationship with Sparsholt; they are a very good college. I think it’s a case of communications issues between us and them, really.”

He said the company was still unsure about why the colleges had brought their involvement to an end.

“We never claimed to be a perfect organisation. We just feel the level of support required (from the colleges) for such a high contract could have been far greater.

“It’s been pretty devastating for everybody, including the colleges. You can’t please everybody all of the time, but we did try,” he added.