Colleges heavily involved in franchising job-related courses are demanding more consultation on proposed changes aimed at tightening funding for off-site training.
A new working group of principals claims that changes in funding for national vocational qualifications delivered in workplaces could force colleges to cut back severely on support for those programmes.
The result, says the group, would be failure to reach the Government's education and training targets and damage to the economy.
The Further Education Funding Council set out the proposed changes to funding of workplace NVQs in a consultation document covering a range of revisions to the "tariff" - the FEFC's menu of prices it will pay colleges for delivering qualifications.
It proposes listing NVQs individually for the first time, spelling out how much colleges can claim for each on a sliding scale according to how delivery is split between them and employers. At present, colleges decide for themselves what they can claim according to hours of work delivered.
The FEFC originally intended to impose the changes on the sector for the current academic year but abandoned the plan.
Leaked news of the changes caused uproar among the colleges most likely to be affected. They claimed the revisions should not be imposed retrospectively since they had already signed contracts with employers based on the old rules.
However, the colleges now claim that the one question in the tariff consultation relating to the issue is inadequate and are calling for a fuller debate.
Martin Jenkins, principal of Halton College - the fastest-growing college in the country, largely through extensive employer franchises - said he and other principals supported the individual listing of NVQs but did not feel the FEFC was proposing to allocate enough cash for the work.
Vocational education was being undervalued, he said, adding: "I hope the FEFC will realise they have got their figures wrong and increase the number of units allocated to NVQs."
According to the FEFC's sliding scale, colleges would earn most for delivering on-the-job training and least for providing only support and assessment. They would be banned from claiming for assessment only, and would be expected to charge the employer for the service.
However, another principal with a substantial franchising programme insisted that providing assessment was often a "foot in the door" to employers who then purchased more training.
The high franchisers' case is likely to cut little ice with the FEFC, which is anxious to tighten up controls of franchising activity. The council's regional offices have this term asked colleges for information on franchising in an unprecedented level of detail.
An FEFC spokewoman said: "We are pleased to hear any view which colleges might want to put forward as part of this consultation."
Many colleges will have little sympathy with the group's arguments; some suspect over-claiming may have helped some major franchisers achieve fast growth.