The head of a large adult education centre has been suspended by the local authority after forming her own company to run classes at a nearby secondary school.
Jill Harris, adult education manager at Chessington Community College in Surrey, has appealed to Gillian Shephard, the Education and Employment Secretary.
Ms Harris says her move is in line with Government policy "that educational institutions should free themselves from local authority control to run more efficiently".
She has made more than 40 part-time tutors shareholders in the company and hopes to get money from the Further Education Funding Council under a new policy allowing private companies to bid directly for funds.
The dispute at the college - praised by the Office for Standards in Education as one of the most rapidly improving in the country - started last year over the use of computers, classrooms and heating.
Ms Harris complained to the chair of governors Nick Pinfield about poor accommodation and management of the adult education programme, for which the centre was paying Pounds 2,000 a year in fees. "I told him I did not think the FEFC would continue to fund these courses with such unsuitable facilities and with schoolchildren allowed to tamper with computer equipment."
In December, Ms Harris had her centre's advisory committee's backing to form Chessington Adult Education Centre Ltd and applied to the FEFC to put on courses at the college and elsewhere.
It was opposed by the principal John Hayes and the new director of education John Braithwaite on the grounds that Ms Harris was acting to the detriment of the college. The governors then suspended her.
The FEFC eventually indicated that it was prepared to fund Ms Harris's private company, provided suitable premises could be found. Ms Harris plans to put on a full programme of courses next autumn, while Mr Hayes says that the college will not be available to them.
Mr Hayes insists Ms Harris's complaints contain inaccuracies. "I am undertaking an investigation into the current circumstances of the college's adult education centre. At the conclusion of this, the governors intent to provide a full programme next term at our centre, and they hope that this will be with the full support of the FEFC."