These accredited colleges will enjoy greater autonomy. They will face FEFC inspections every six years instead of every four and receive #163;50,000 to finance dissemination of good practice.
Colleges will have to meet tough entry qualifications to apply - inspection grades of 1 or 2 for governance, quality assurance and management and "good" or "outstanding" marks for at least half the curriculum, with no area deemed less than satisfactory.
They will have to demonstrate that student achievement and stay-on rates have improved for three consecutive years.
The first cohort of colleges - those which will have been inspected twice since incorporation - will be able to apply for accreditation in November this year after the summer's examination results are released. The first accredited colleges are expected to be announced in Spring 1999 and will be able to carry an "FEFC-accredited" logo on publicity.
The FEFC's chief inspector Jim Donaldson said the new hands-off inspection regime would allow well-run colleges to "fly solo". He estimated that, on present performance, only 20 to 25 per cent of colleges would meet all the criteria but denied that the new distinction would divide the sector.
He said: "We hope that levels of achievement and performance will be enhanced to a much greater extent all round.
"Where colleges are not performing well it will concentrate their mind in terms of the areas where they will have to improve. The basic principle is that they all should be capable of meeting these criteria. It's important to have the same level of expectation of all our colleges. "
He added that the reduced inspection burden - FEFC inspectors currently spend 1,500 days a year assessing colleges - would allow the FEFC to "concentrate its resources in terms of help to those that need it".
The idea has met with near- unanimous support from the sector - more than 90 per cent of colleges responding to an FEFC circular approved of the principles, criteria and procedures for accreditation. But 12 per cent disagreed with the timetable for introducing accreditation before the next cycle of inspections is complete.
Education and Employment Secretary David Blunkett has also signalled his approval of the plans. In a letter to FEFC chairman David Melville last month he described accreditation as "an appropriate and desirable means of recognising excellence", adding that such colleges would become "beacons for the rest of the sector".
A code of conduct will prevent colleges from advertising themselves as "the only accredited college in the area" before neighbouring institutions have had their second inspection and are able to apply for accreditation.
The proposals come in the same week as the FEFC set out a 10-point agenda for boosting college performance which includes plans to improve student retention and achievement. Benchmark data issued to all colleges with the next two weeks will pave the way for league tables comparing performance between colleges with similar educational and social intakes.
Jim Donaldson said: "This will be a very powerful tool to allow colleges to analyse their effectiveness. It will give them a much sharper focus and allow them to look at their own performance against colleges in similar situations in other parts of the country."
The proposals - to take effect from September - also include annual reinspections for cross-college courses graded 4 or 5, in line with present arrangements for curriculum areas, and extra funding to reward excellence.