Colleges could be put in charge of funding the new organisation responsible for improvement in further education - giving them up to pound;300,000 each to spend on driving up quality.
The new body, whose chairman and chief executive are now being recruited, could be funded by voluntary subscriptions from colleges, which would receive extra cash to pay for these training services to update lecturers' skills or teach new management practices.
It will carry out specific programmes to put in place major government reforms, such as training to implement the new diplomas as it replaces the Quality Improvement Agency and the Centre for Excellence in Leadership. These centrally funded bodies are currently responsible for raising standards but are due to close in the spring because ministers want their functions brought under one roof.
Colleges and other training organisations will also be given voting rights to appoint a proportion of the board of the new organisation.
This will give them a say in quality-improvement strategy, with 65 per cent of votes going directly to providers and the remainder going to the proposed new Single Voice self-regulation body.
The idea has been welcomed by colleges, which have been calling for more autonomy and to be trusted to decide for themselves how quality improvements should be made.
In its consultation paper, the Department for Innovation, Universities and Skills proposes that the new organisation would be funded with a grant from the budget of about pound;120 million which currently pays for QIA and CEL.
Later, they suggest this money would be paid directly to providers, who would either pay a levy to support the FE improvement body, or who could voluntarily subscribe as members.
Sue Dutton, acting chief executive of the Association of Colleges, said the move would be welcomed by colleges, which had called for more control over plans to improve further education.
She said: "It's one thing that AoC members have wanted the Government to change.
"It will give more autonomy to colleges to manage their own improvement strategy. We've been asking for this for over 18 months.
"One of our hopes is that more money will go to the front line. The majority of money which is spent on improvement is spent out of colleges' own budgets anyway."
Putting extra money into the hands of colleges for improving quality and giving them more influence over the central organisation should help make staff training more personalised and relevant, she said.
Ms Dutton says the new FE improvement organisation would be more accountable - and better quality - if it had to earn fees from members rather than than being supported by central funding sources. "If an organisation is doing the right things, people will want to put their support behind it," she said.
Simply handing over cash for improvement to providers and abolishing the national organisations for raising quality was ruled out because it would mean losing economies of scale.
Ministers felt it would be harder to check that staff training programmes were effective, and it would leave no single organisation responsible for commissioning research on how best to improve teaching.