Ministers have U-turned over strict new rules on free college courses for students on benefits, which threatened hundreds of thousands of adults with bills of up to pound;1,000 for qualifications.
From September, FE providers were to be restricted to offering fully funded courses to benefit claimants on jobseekers' allowance and those on disability benefits who are looking for work.
But FE minister John Hayes has now said that colleges would be given "some local discretion" to provide free courses to students on other benefits, if the training was aimed at helping them into work. With no additional funding, colleges could struggle to provide for all students, however.
Mr Hayes said: "The Government has repeatedly taken action to lessen bureaucratic restrictions on colleges, and to give them the flexibility to respond to the needs of employers and learners in their areas.
"It is good news for people who are currently reliant on benefits but want to get into work, and good news for employers looking for a local supply of the right skills to help their businesses to grow."
The decision comes after research last month by the Association of Colleges (AoC) revealed that nearly 250,000 students in England would lose the right to fully funded courses under the proposals, which would leave them facing fees of between pound;500 and pound;1,000 for typical full-time courses.
Women were disproportionately affected: 75 per cent of the students on "inactive" benefits, ranging from income support to housing benefit, are female. In London, 67 per cent were also from ethnic minorities.
The AoC said it was pleased the Government had listened to its lobbying on this issue and given colleges a chance to allow students on inactive benefits to train and find employment.
AoC chief executive Martin Doel said: "We are pleased that this announcement recognises the pivotal role colleges have in economic growth and jobs - the distinction being made between funding courses for individuals receiving inactive and active benefits was threatening to compromise their ability to perform the role. College courses are an important route into employment for many people on benefits, irrespective of the type of benefit."
The University and College Union (UCU) said the change showed that the Government recognised the benefit rules for fully funded places were a problem, but without additional funding there was no solution yet.
UCU general secretary Sally Hunt said: "We would welcome this U-turn, but it must be noted that no additional funds are being made available to colleges to meet the demands of their communities so many learners still face the possibility of missing out on education and training.
"The Government has acknowledged there is a problem, which is a positive step, but it has yet to provide a solution and we await further details. Ministers need to spell out what freedoms they will give colleges and what level of discretion institutions will have to provide free courses under the revised plans. I sincerely hope this doesn't lead to a postcode lottery."