Deloitte and Touche, the firm of auditors blamed by MPs for not alerting governors to financial irregularities at Halton College, has resigned from its contract with the Widnes-based college.
The Public Accounts Committee report into Halton College said Deloitte and Touche had "let down" the college and found it "deplorable" that the firm had tried to deny the National Audit Office access to information.
The committee urged Halton to seek compensation but the college decided against it after learning that it would cost pound;150,000 to launch a claim.
But, as reported in last week's FE Focus, the Further Education Funding Council may take further action over the role of Deloitte and Touche in the collapse of Bilston Community College in the West Midlands.
Halton's acting principal, Peter Cavanagh, said the college was looking to appoint new auditors at the earliest opportunity.