Unions are demanding urgent meetings with the management of Inverness College over fears that it plans to make 25 lecturers redundant because of a budget shortfall of pound;500,000.
The Educational Institute of Scotland is blaming poor stewardship for the college's financial problems and has warned that redundancies would be "too close to the bone".
Professor John Little, principal of the college, said: "No decisions have been taken and no specific areas of examination have yet been pinpointed, but the need to make efficiency savings inevitably means that voluntary and compulsory redundancies are being considered as part of a whole range of ideas designed to improve college efficiency."
Staff and unions had until Tuesday this week to respond to the first stage proposals and detailed proposals will be produced by the management during the week of May 16. The college expects to announce its final efficiency package in early June.
Among the proposals in the first stage of consultation are: a moratorium on all staff recruitment, continuing discussions to identify areas of savings and where new income can be generated, and possible staff redeployment.
A spokesman for the college said that under the formula used to fund staffing- the student unit measurement system (Sums) - Inverness had 264 weighted Sums compared with the Scottish average of 360.
He added: "Staffing costs for 2004-05 have exceeded budget provision, despite measures already taken to reduce the overspend. As a result of this overspend Inverness College is for the first time unable to meet its commitment to produce a sufficient level of annual surplus to defray historic debt."
Ken Mackie, chair of the college board, said: "Keeping the college in a healthy financial state is also in the best interests of our students and the communities we serve. The actions taken will reinstate our position on our financial recovery plan and thus underpin the future of this college, which has to be the priority concern."
But grave concerns were expressed by Marian Healy, further and higher education officer for the EIS, that up to 25 lecturers' posts were at risk at a time when the college had 231 temporary, part-time members of staff.
She claimed that jobs were in jeopardy because college staff had been given time off teaching duties to do development work for the University of the Highlands and Islands but that the UHI was not recompensing the college.
"This would explain why the college has such a high temporary part-time staff ratio," Ms Healy said.
She also questioned the decision to hire a project manager to oversee budget cuts when the college could have called on the expertise of the Scottish Further Education Funding Council.
"The college has not asked the funding council to review the terms of its recovery plan, nor has it requested resources from the funding council's restructuring grant which might have offered some additional help in terms of voluntary severance," she said.
She added: "We need to sit down with management and identify exactly what the issues are so that we can understand whether redundancies are genuinely required or there are other ways in which they can support the college in being a bit more efficient."
Mary Scanlon, Conservative MSP for the Highlands and a former lecturer in economics at Inverness College, warned of the devastating impact redundancies would have on the Highlands and has called on Jim Wallace, Lifelong Learning Minister, to write off the college's debt of pound;3.3 million.