The Association of Colleges says that the drive to slim down the list of vocational courses eligible for public funding must avoid excluding the tailored qualifications employers want.
The AOC, responding to a Department for Education and Employment consultation on a revision of the list, says the proposed changes could conflict with government exhortations to colleges to be responsive to employers' training demands.
The DFEE issued a paper in July proposing a greater insistence on vocational relevance of qualifications before they could be approved for funding. It suggested introducing a requirement that qualifications have industry standing and "provide broad employment and occupational opportunities".
At the same time, funding would be withdrawn for any awards specific only to individual employers .
The AOC calls for cash to remain available for a range of awards, including those outside the Government's flagship national vocational qualification framework. It points out that despite an increase in take-up, 10 years after their introduction NVQs are only used by around 8 per cent of employers.
As well as aiming to halt the proliferation of vocational qualifications, ministers are also keen to ensure awarding bodies have robust systems in place to monitor quality of their awards.
The AOC welcomes recommendations that awarding bodies should not usually also be providers of learning or training in the same vocational area as the award because of the risk of a conflict of interest.
It says the dual role raises "very real ethical issues", and suggests it is "impossible to see how conflicts of interest do not arise". It calls for measures to ensure the risk of conflict is eliminated.
However, though the FE superbody supports the DFEE proposal, some colleges fear the tighter rules could seriously hit groups of courses such as first aid and sports coaching.