But the announcement of the proposal took other key players in the field by surprise. Further Education Funding Council chiefs immediately distanced themselves from the claims.

Graham Lane, chair of the Local Government Association, said a single body would solve the bureaucratic nightmare of LEAs, the Further Education Funding Council and training and enterprise councils trying to organise joint planning.

Mr Lane was responding to questions from Margaret Hodge, chair of the Commons education and employment select committee. The committee was concerned over the big differences in cash given to schools, colleges and TECs, often for the same courses.

Ms Hodge said that much-needed plans to put education funding on a level playing-field post-16 risked descending into chaos with three conflicting bureaucracies. “I look at this with horror. It will be chaos for students,” she said.

In a surprise response to her attack, Mr Lane, head of the Government’s task force on post-16 funding, called for a single funding and planning agency.

He said: “We will finish up with a unified funding body. We are working on a convergence of funding and planning in post-16 courses across the country. We want to fund the course rather than the student.”

Mr Lane’s call for a unified body provoked surprise among TEC leaders and the FEFC.

Geoff Hall, FEFC director of programmes, said: “We believe there are too many bodies involved in post-16, but in no way would we wish to be the drivers of a takeover. That is up to the Government, but we are happy with the convergence between us and the LGA on funding and planning.

In the same inquiry, Paul Mackney, general secretary of the lecturers’ union NATFHE, demanded more money for an FE sector “on a knife edge”. He said: “Morale in colleges is at rock bottom and the education quality on offer to students is beginning to slip.”