Aylesbury college in Buckinghamshire, where leadership and management were criticised as inadequate in a reinspection report published last September, is now making "encouraging progress".
Three curriculum areas failed by the Office for Standards in Education last year were rated satisfactory by an inspection team appointed by the college in its report last week.
The Learning and Skills Council has now asked principal Pauline Odulinski, in charge during the two failed inspections, to take the college forward.
David Ansell, executive director of Milton Keynes, Oxfordshire and Buckinghamshire LSC, said: "The college has had two terms of an academic year and in that time has travelled some distance.
"It has shown good progress in management, quality assurance, and in the quality of teaching and learning.
"I am inclined to think that the confidence that has been shown in the leadership has been borne out, and that in time this college will become a respectable and good college."
Ms Odulinski said the latest verdict from inspectors vindicates her decision not to quit last year, when her leadership was castigated for the second time.
"It always goes through your mind whether you are the right person for the job," she added. "It is a matter for your own conscience, and of how much confidence there is around you about what you are doing.
"Last year's verdict was a blow to everybody, but you have to believe in what you are doing. I was determined to prove them (the inspectors) wrong because they got it wrong."
Ofsted first rated the college inadequate in 2002 and issued the same verdict in its reinspection last year.
A 12-point emergency action plan was then put in place, requiring the college to make improvements within six months.
At the end of that period, the college appointed Tribal Education Consulting to hold a mock inspection to examine four curriculum areas and to look at its quality assurance and data systems.
Ms Odulinski, who became principal in 2000, said: "Their report seems to be saying that we are doing the right things, that we have the right structures in place, and we have the right procedures.
"The staff have made a remarkable effort, with everyone working hard to do their best for the students, and to prove that we are OK. They wanted to prove we were better than last year's judgement indicated we were."
Mr Ansell added: "The line between a college being declared adequate or inadequate is sometimes very fine. We continue to have confidence in the leadership."
Ms Odulinski said a college is rated inadequate if more than 10 per cent of teaching observed by inspectors is unsatisfactory, and last year that figure was 10.5 per cent.
That figure fell to 6.7 per cent in the latest inspection, below the national average of 6.9 per cent.
She also pointed to two other developments in the college's progress. Work has just begun on a pound;30 million rebuild of the college, the first phase being completed next year and the final phase in 2007.
And she said the college has just struck a pay deal with the lecturers'
union Natfhe, agreeing to give staff the recommended 3 per cent pay increase.
Natfhe's regional officer Michael Moran said: "We are glad the college has turned the corner and we feel that it is down to the commitment and hard work of our members.
"If it does implement the national pay deal and and looks at its long hours culture, we think it will continue to improve."