Finance directors, in Liverpool for an annual conference this week, must submit their college budgets by July 31. But they fear a harsh Budget on June 22 will mean having to provide entirely new budgets to their corporations later in the year.
"We are between a rock and hard place," said David Pullein, chairman of the College Finance Directors' Group and finance director of Leeds College of Building.
"We have to submit our budgets by July 31. But if we get the devil in the detail in the Budget on June 22 and the cuts are of the magnitude we are expecting, then we are talking about a major redrafting of colleges' financial plans."
He said the likely cuts would lead to the creation of fewer and larger colleges in the next five years.
"I predict that we will have two-thirds of the colleges we have now in about five years' time. There will be more of what I call supertanker regional colleges," he added. "But larger size brings bigger risks. What happens if one of their huge colleges fails? Have the risks associated with that been fully thought out?"
But he said the crisis gave finance directors a chance to show leadership. "I wouldn't be surprised if a lot more principals in future are former financial directors," he said.
Julian Gravatt, assistant chief executive of the Association of Colleges, said: "A really important thing is honesty. Colleges must understand the position they are in and what they are facing. It is important that finance directors identify what solutions there are and tackle longstanding customs that may have been right when there was a lot of money around."