Debt is expected to soar by more than 80 per cent by the millennium in Welsh colleges, according to forecasts produced by funding chiefs in the principality this week.
The Further Education Funding Council for Wales predicts total college debts will rise to Pounds 7.5 million by 2000.
Twenty-one colleges, three-quarters of the Welsh sector, forecast deficits.
FEFCW staff warned that cuts would mean equipment being increasingly outdated, and deteriorating buildings.
Director of finance Richard Hirst said; "The overall position of the sector is extremely worrying despite the remedial actions institutions have taken to reduce staff costs and delay expenditure on capital and educational developments."