Fears that most of Northern Ireland's colleges were to be merged were dismissed as "misinformed and speculative" by officials in the province.
Principals were sworn to secrecy after a recent meeting with Ulster's Department for Education and Learning but have since been allowed to share the plans with college staff.
The province is expected to end up with six colleges instead of the current 16. FE Focus understands there will be a further meeting with principals about how the plans can be carried out. Options include a series of mergers or disbanding the colleges and launching new institutions from scratch, with the possibility that principals could be hired from outside the current 16.
Eight of the province's older current principals are expected to apply for early retirement.
It is unclear how many campuses would continue to offer courses or whether any cuts in staff will be restricted to management ranks rather than lecturers.
Already, unions suspect the worst. Jim McKeown, Northern Ireland secretary of Natfhe, the lecturers' union, said: "The DEL has told us no final decision has been taken, but we don't believe them. The system is awash with rumour about mergers and this is very unsettling for staff."
He said previous mergers have gone further than simply reducing bureaucracy, with a third of lecturers and administrative staff losing their jobs.
Belfast's Institute of Further and Higher Education, Ulster's largest college, was formed by the merger of three colleges, a move that saw the number of lecturers fall from 600 to 380.
A DEL spokesman said: "The union's comments are both misinformed and speculative."
There were 27 colleges in Northern Ireland in the early 1990s. But it was clear under the recent National Assembly's review of FE that DEL, which has taken advice from private consultants, feels there are still too many.
At present, funding in FE flows straight from government to the colleges, but pressure for a unified system of post-16 education has led to speculation that Ulster will get the equivalent of the Learning and Skills Council in England.
DEL believes that incorporation of colleges, when they left local government control, has led to duplication of administration, a charge which has also been levelled at FE in England and a problem the LSC has taken steps to rectify through mergers and "strategic area reviews".