The air of calm belies the discontent brewing beneath. If the last government’s policy was intended to foster greater competition, then it has certainly worked in Nottingham’s colleges.

The city once made its money from industries as diverse as lace making and coal mining. Now, buried under a thriving, vibrant surface, lie concealed some of the worst academic standards in the country.

If the GCSE results of some of the less affluent parts of the city were separated out, they would trail behind those of Islington and Tower Hamlets in London. Less than 60 per cent of the post-16 age group stay on in education.

It is in this context that Nottingham’s eight FE and sixth-form colleges work. Labour would like them to forge partnerships to tackle underachievement, but the very nature of the challenge has led to bitter wrangles.

Principals tell of attempts to poach their students, or accuse each other of running inferior courses. It is estimated that overall they spend more than Pounds 1 million a year on advertising and promotion.

Part of the problem is the privately-run Nottingham Community College, formerly St Ann’s Training Workshops. St Ann’s was reborn as the NCC this yearto provide training and education for the Asian community. Since then it has evolved to include other ethnic and under-privileged groups. The NCC claims not to be competing with other colleges because it caters for those who might not normally have considered FE. But it is a development which has managed to antagonise many principals.

What they object to most is the name of the new college. Three years ago, the eight principals reportedly agreed not to use Nottingham as the first word in the title of any new or merged institution. But this unwritten agreement is increasingly being ignored.

The People’s College - next door to the new NCC - has been most vocal in its opposition. Its principal, John Rudd, claims that the NCC is neither a college in the traditional sense, nor accountable to the community, so its name is misleading.

However, Hassan Ahmed, the NCC’s chief executive, believes Nottingham’s colleges should concentrate on saving themselves from each other rather than blaming him.

He says: “We aim to complement the work of the FE colleges, not threaten it. Some colleges in this city will survive and some will not. With just 3, 000 students we are a very small player in the scheme of things and are no threat to anyone.”

He says there are two main factions emerging in the race for students and status. He does not name names but describes them as “the winners and the losers”.

Mr Ahmed may be proved right. A far greater threat to the FE status quo in Nottingham is the proposed merger of Clarendon College, which already attracts almost a third of the city’s students, with Basford Hall College.

The amalgamation will create an institution of 47,000 students with a turnover of Pounds 30 million and an annual surplus of Pounds 3 million. It will be known as Nottingham Regional College Group, and has alarmed the city’s other colleges.

Clarendon principal Patricia Morgan-Webb, described by another principal as “a formidable woman who is not to be under-estimated”, is also planning to open a new site in the centre of Nottingham, in competition with another college, Arnold and Carlton.

Mrs Morgan-Webb, newly-appointed to the Qualifications and Curriculum Authority, says that the agreement on names was never formalised.

She says: “I always encourage my staff not to get over-excited about the competition, because if we are doing things right then we have nothing to worry about.

“I don’t bother about the NCC either because it is effectively in the private sector so we can do nothing about it.”

Others do not share her laissez-faire attitude to the prospect of competition. Ronnie Ogier, the principal of Arnold and Carlton, said she had found out about Clarendon’s plans for a new site through the local media, which estimated it would attract 15,000 students.

She said: “I would like to know where these students are going to come from. I would feel less threatened if I had more information and had found out about these proposals through means other than the newspapers.”

Angela Ainsworth, principal of Basford Hall, has relished the increased competition. She believes it has raised standards and brought more people and hence more money into FE in the city.

Basford Hall, as the main franchiser of courses to the NCC, is reaching students it would not normally had attracted. Its proposed merger with Clarendon would prevent wasteful duplication of courses, says Angela Ainsworth.

“We are not seeking to create a monopoly, but to retain choice for the community. We think this a new model for colleges for the future.” she added.

The Nottingham branch of the lecturers’ union, NATFHE, predicts problems ahead.

A spokesman said: “What is happening is indicative of how completely disorganised the system has become in the market place. We can see no good coming out of it.”