Heads this week accused the Assembly government of "financial incompetence" as the implications of the latest post-16 budget settlement became clear.
Their anger came as the teachers' union ATL Cymru reported a record number of redundancy notices among its members.
Last month's government announcement of an extra pound;8.9 million for schools and colleges was initially welcomed by unions, but it has emerged that only pound;2m will be pumped into schools, while the lion's share will go to FE. Schools with sixth forms lost pound;8m on what they expected.
Post-16 funding became an issue in Wales in January when, because of the economic downturn, the government announced what was in effect a 7.43 per cent cut over and above what heads expected.
In a dramatic turnaround after weeks of protests from unions and schools, extra money was found - although only after the government dipped into its reserves.
But only 11 out of Wales's 22 local authorities received a share of the extra cash. The authorities are now deciding how best to distribute the money to schools.
Heads told TES Cymru they were in no doubt that they would have to cut courses, with small numbers next year limiting student choice.
Most secondary schools with sixth forms will now get the same level of funding as last year, but many heads had already made plans based on the money they were expecting to receive before the 7.43 per cent cut was announced.
Neil Foden, head of Ysgol Friars in Bangor, said he was pound;48,000 down on what he had expected to receive based on last year's funding settlement.
He said he would probably get pound;6,800 back from Gwynedd, his local authority, which has an extra pound;38,000 to share among its schools.
But Mr Foden said the predicted amount would do "virtually nothing" to help his 1,250-pupil school. It would have reserves of less than pound;25,000 - pound;100,000 less than the minimum recommended amount for a school of its size.
Mr Foden said post-16 courses with fewer than 10 pupils would have to be axed, and any unforeseen circumstances could put the school into a deficit budget next year.
"If we get a further cut or more financial incompetence from the Assembly government, we may even have to cut staff," he said.
Alun Llwyd, head of nearby Ysgol Dyffryn Ogwen in Bethesda, lost pound;18,000 because of the 7.43 per cent cut. "It was completely out of the blue," he said. "I have written to Jane Hutt (the education minister) and John Griffiths (the deputy skills minister) telling them this will have a very severe effect. We are looking at redundancies and cutting provision next year."
Wayne Newton, head of Morriston comprehensive in Swansea, said he had lost pound;53,000, but his local authority will not receive any of the new funding.
"The original cut was a shock and a devastating one, particularly the manner in which it was delivered, with no warning or consultation," he said. "For Swansea to get no extra cash is very disappointing. It is going to impact on what we can do. There will be redundancies - the exact number we have yet to work out. It's a grim situation."
Teachers' unions are warning of job losses throughout the sector. Dr Philip Dixon, director of ATL Cymru, said: "I have never seen so many notices of redundancy coming into my office as I have in recent weeks. It's a major concern and highlights the need for a clearer, more transparent funding system."
The Welsh-medium union UCAC launched a postcard campaign at its annual conference last month calling for a clearer funding system for sixth forms.
Education officials are said to be upset at the adverse publicity they have received since the announcement of extra cash because they believe they did everything possible to secure the money during difficult economic times.
A Welsh Assembly Government spokesperson said: "For sixth forms, the January announcement resulted in a small rise in funding that has recently been increased. It is factually incorrect to say that funding had been cut and the initial increase has now been added to with pound;2m for LEAs facing the most difficult budget. The reality is that, despite a difficult budget settlement, sixth form funding, for 2009-10, is being increased by 2.24 per cent. It is the volume of learning that is the main determining factor of the funding variations experienced by different local authorities.