Students with severe disabilities have lost out badly in the carve-up of responsibility for their education between colleges and local authorities.
A report from the Further Education Development Agency reveals young people and adults with the most profound learning difficulties are "falling through a gap" in provision as a result of the split.
The study reveals providers are cutting back on programmes for those with greatest need because they are too costly.
Among those found to be losing access to education as a result are adults with multiple disabilities, the mentally ill, the elderly and those who need expensive support because of physical or sensory impairments.
The report's authors call for more action at a national level to ensure the further education sector meets its legal responsibilities to offer adequate and sufficient provision for all learners.
The issue is certain to be among the concerns raised by the Tomlinson Committee, whose report on provision for students with disabilities is due next month.
The 1992 Further and Higher Education Act divided statutory responsibility for learners with disabilities between the Further Education Funding Council and local education authorities.
The FEFC provides cash for mainly vocational courses leading to qualifications, so-called "schedule 2" programmes, while local authorities continue to fund non-vocational provision.
The FEDA report, based on a survey of staff from 35 education providers across England and Wales, finds that the split has caused confusion over which courses are eligible for what funding. It has also led to a lack of co-ordination between college and LEA provision, leaving some areas of the country with little or nothing on offer for the seriously disabled.
Cuts in local authority funding have led to a shift in priorities away from working with people with severe learning difficulties in a bid to "make the most efficient use of diminishing resources".
It says: "Classes where support needs are high, or those requiring double staffing, are no longer seen as justifiable." One LEA's adult and community education service axed provision for students with severe disabilities.
As funds are juggled, learners with mild disabilities who require only a little extra help have ended up benefiting from the funding changes in the 1992 Act, the report finds. But, it adds: "those who are able to learn with less support are prioritised while those with high support needs are no longer receiving education."
As LEA budgets dwindle, council providers have turned increasingly to the FEFC, which funds most college provision. But though those surveyed by FEDA thought the FEFC's funding mechanism had brought significant benefits for many students with learning difficulties, its emphasis on funding achievement was seen to disadvantage the severely disabled.
Such students were sometimes "pushed towards accredited programmes which attract funding but which do not meet their learning needs", while others were excluded because they had no chance of gaining qualifications.
The FEDA study makes a series of detailed recommendations to reverse the decline in provision for severely-disabled learners.
The report's author, Sally Faraday, said a top-level policy change was needed to ensure effective local monitoring and avoid "big gaps" in provision.
FEDA chief executive Stephen Crowne said: "The FEFC, local authorities and colleges need to develop coherent plans to provide these opportunities in a more equitable way."
Deborah Cooper, director of SKILL, the national bureau for students with disabilities and a member of the Tomlinson Committee, said SKILL was deeply concerned at the lack of clarity over the split between local education authority and FEFC-funded provision.
She said: "This is not just a case of some quirky bunch of people looking for a small group of learners to worry about.
"The local authorities and the FEFC have a legal requirement to have regard to students with disabilities, so this is a matter of national significance. "