The number of colleges has fallen from 27 to 16 since the early 1990s and there may still be too many, according to a report published by the province's Department for Employment and Learning.
The report is based on a review of FE which was being carried out by the Northern Ireland Assembly but, since its suspension, has become the responsibility of Jane Kennedy, the Liverpool Wavertree MP and lifelong learning minister.
Natfhe, the lecturers' union, says there have already been too many mergers and campus closures in the province.
Towns like Newcastle, near the border with the Irish Republic, and Larne, on the north-east coast, are badly served, the union claims. In Belfast, three colleges have been merged into one.
Natfhe fears the report, Further Education Means Business, will revive proposals contained in a Government-commissioned report in 1993 which suggested only four colleges for the province.
Jim McKeown, regional official for Natfhe in Northern Ireland, said: "In the past, when there have been mergers we have had to deal with massive redundancies.
"At least a third of lecturers lost their jobs in each of these mergers.
"The prospect of another raft of shotgun marriages, because that's what they are, is pretty depressing news."
The report says mergers will be needed if FE is to raise its profile relative to schools and universities. Its authors argue: "To enhance its status may require the creation of colleges which are larger in size than many of those which currently exist."
Incorporation of colleges has led to a number of problems, according to the Department for Employment and Learning. These include "major financial difficulties" in some colleges, "inefficiencies through duplication of services" and confusion caused by the funding system.
The report says: "The model of incorporation has, perhaps, relied too heavily on competition to the detriment of collaboration, and has taken insufficient account of the importance of enhanced performance."
In future, the department will insist on more collaboration between colleges. But the report says incorporation of colleges has more strengths than weaknesses and should be modified rather than scrapped.
The authors also call for an Ulster-wide approach to planning post-16 education, raising the possibility that the province could get its own version of the Learning and Skills Council.
Natfhe supports the creation of such a body.