It was hailed as a chance to rescue FE from severe budget cuts - a charity with cash in the bank was launching a joint venture to help run a struggling college.
But less than a year since the Learning and Skills Network (LSN) took over Reading College in a partnership with Oxford and Cherwell Valley College, the deal appears to have collapsed.
All of the LSN directors of the joint company set up to run Reading College saw their appointments terminated earlier this year, according to Companies House records. The college now names just five board members, all from Oxford and Cherwell Valley's governing body.
LSN is also selling the consultancy it bought in 2009, which specialises in providing interim management for troubled colleges, called FE Associates.
FE Focus understands that the consultancy was bought for about pound;6 million, but is due to be sold in October for a nominal sum of pound;1. LSN confirmed the sale plans but declined to comment on the price or to confirm the end of its involvement at Reading. Yvonne Smithers, chief executive of LSN, said her aim was to ensure the charity's financial health.
She said: "We have had to make some very tough decisions at LSN in light of the economic climate, government-imposed austerity measures and the need to direct more resources at frontline teaching and learning.
"We are in the new post-spending review world that all in the education sector are struggling with and the expected advantages of working together never came about in this new trading environment.
"We are focusing on core business and concentrating on what we do best. We understand pedagogy, what teachers need in terms of content and the support they need to deliver it. What we are good at is making learning work from the classroom to the boardroom."
No one from Oxford and Cherwell Valley College, which has pledged to make Reading "world class", was available for comment at the time of going to press.
Last January, when it began its run of acquisitions, LSN reported a surplus of pound;10 million in the previous financial year. The deal to run Reading College required it to contribute working capital to offset the college's debt problems.
But as LSN spent pound;8.8 million on a series of acquisitions, its revenue plummeted, coming in pound;12 million under budget, while its pension deficit grew to pound;7.9 million.
As well as these latest changes, the financial difficulties also prompted the sale of the premises of the National Extension College, a distance learning college set up by Michael Young as a precursor to the Open University, which was expected to bring in about pound;6.5 million.
Supporters of the NEC said the property sale put its future in doubt, however.