Tough measures to prevent corruption among organisations using public funds for training are being drawn up by Nicholas Tate, who will take control of national vocational qualifications this autumn.
New checks on quality, standards and costs will be imposed by the Qualifications and Curriculum Authority when the School Curriculum and Assessment Authority and the National Council for Vocational Qualification merge.
The House of Commons Public Accounts Committee, which has harshly criticised the way freedoms have been abused by training providers, is concerned that the costs of bureaucracy "could be disproportionate to the risk".
Dr Tate has warned that the alternative is measures to deal swiftly with offending training providers. "The QCA will have tough statutory powers to remove publicly-funded qualifications and publicly accredited awarding bodies from the approved list if there is anyevidence of impropriety.
"The Public Accounts Committee indicates the vital need for the QCA to have strong quality assurance powers to probe NVQ centres and their operations. "
Training and enterprise councils, strongly criticised in the report for incorrect payments to training groups, said new inspections teams will bring the necessary checks.
Chris Humphries, policy director for the TEC national council, said it was important to ensure that training was "properly used for the purpose for which it is intended".
Stephen Byers, Labour's training spokesman, said: "Ministers have failed to act over several years despite this issue continually being drawn to their attention."