The pound;300 million plan for a "super college" in Glasgow city centre is now facing uncertainty after ministers said they needed more time to decide whether to approve it.
The three colleges involved - Glasgow Metropolitan, Central and Glasgow Nautical - have agreed to the merger proposal and expected ministers to give their approval by August 1.
But the Government has now announced that no decision will be made until September 1 "to enable full and proper consideration of the complex proposal".
Official sources are at pains to stress this is not an indication that the ambitious project, which will involve major capital investment in the further education estate in Glasgow, will not go ahead.
But The TESS understands that the Government has become increasingly concerned at the price tag at a time when all public spending is coming under unprecedented scrutiny.
There have already been hints from the Scottish Funding Council, which makes the decisions about financial support for colleges and universities on behalf of the Government, that the cost of the new college will have to be significantly reduced.
Ministers have also been concerned at the failure to harmonise terms and conditions for lecturers at the three colleges. And they appear reluctant to give the go-ahead to a merger which does not include Stow College. It pulled out of the protracted talks on the merger, arguing that there was "no compelling case" for it.
The Government finally came under pressure from the Educational Institute of Scotland, which claimed there was "no sound educational rationale" for the planned college.
Ronnie Smith, the EIS general secretary, welcomed the Government's decision to delay approval. He pointed out that there would be fewer student places in the merged college than there are in the three existing ones, and said the exclusion of Stow from the plans put its future in doubt.
The EIS has also been seeking a guarantee of no compulsory redundancies during the merger process, but says this has not been forthcoming.
The main driving force behind the merger, Paul Little, principal designate of the new college and principal of Central College, maintained a cheerful outlook and said they would continue to work "to ensure that the merger process continues smoothly".
He added: "We firmly believe that the merger is in the best interests of our students, both current and potential, and of staff and the city of Glasgow."
The political difficulty for the Government now is that it will not want to get embroiled in a fresh row with Glasgow councillors over "Edinburgh ministers" pulling the plug on another major capital investment project for the city, as happened over the controversial axing of the Glasgow Airport Rail Link.