Money should be taken from this year's general further education budget to rescue the troubled Train to Gain scheme, independent learning providers have said.
Training organisations need money now to honour employer contracts and avoid laying off assessment staff, the Association of Learning Providers (ALP) said this week.
The Learning and Skills Council told providers to stop taking on new trainees from April 2009 amid fears that soaring demand would outstrip this year's pound;925 million budget.
Likening the situation to the debacle over capital funding, the ALP said efforts to train workers for the economic upturn were being thwarted by a lack of Train to Gain cash.
Graham Hoyle, ALP's chief executive, said: "After months of talking, the situation now needs resolving urgently. Proposed solutions, which don't require extra money, are on the table and we urge the Government to implement them immediately.
"With businesses needing to be competitive to fight the recession, it seems strange, and potentially damaging to the economy, that many can go a whole year without being able to start workers on the Government's flagship training scheme."
The ALP proposes moving money from the mainstream FE budget to Train to Gain in the current financial year with the amount being "repaid" in the next one.
It also wants access to the entire year's funding rather than having it split into two tranches as at present. It says this would allow providers to spread trainee recruitment more evenly over the coming months.
A growing number of providers are contacting ALP with concerns.
Jane Gretton, vocational qualifications manager at Southend University Hospital NHS Foundation Trust, said: "The stop-start nature of this issue brings difficulty because we cannot create a smooth training schedule for our staff."
Shawn Brown, executive banqueting manager of Zest Caterers in Milton Keynes, added: "We have put a large percentage of our next group off on this round of training, which is obviously a disappointment to them."