Long-awaited plans to pilot education and training vouchers for 16 to 19-year-olds are expected in a Government White Paper to be published in June.
Deputy Prime Minister Michael Heseltine is understood to have put them back on the political agenda in the Government's third White Paper on Competitiveness which will set out a large part of the Tories' pre-election stall.
He is known to have the backing of Chancellor Kenneth Clarke, who wants all post-16 students in education or training to be given a Pounds 2,500 voucher to spend where they like.
Such powerful backing for post-school vouchers will be seized upon by critics as further evidence that the Government wants to extend them to primary and secondary schools. Its controversial nursery vouchers scheme is due to be piloted in four local authorities next week.
Defence Secretary, Michael Portillo, also wants post-16 vouchers. As Employment Secretary last year he rounded on Cabinet colleagues for going cool on vouchers in the light of a disappointing report from consultants Coopers and Lybrand.
The piloting of post-16 vouchers has been hampered by funding disparities between schools, colleges and training and enterprise councils. But a Department for Education and Employment analysis of the costs of 16-to-19 education challenges widespread claims that colleges are more cost-effective than schools. Its findings, disputed by college leaders, will provide evidence for education and training proposals in the white paper.
The report by David Forrester, DFEE head of FE and youth training, leaked to The TES in January, suggests that funding of A-levels in schools and colleges is more equal than previously estimated. Sixth-form colleges receive 7 per cent more than FE colleges or schools for a student taking three A-levels, it says.
Roger Ward, chief executive of the Colleges' Employers' Forum, attacked the conclusions as "neither sound nor reliable", insisting the report failed to support them.
Gillian Shephard, the Education and Employment Secretary, has blown hot and cold on post-16 vouchers. But she is said to be at loggerheads with Mr Heseltine over his plans to use the forthcoming White Paper to expose weaknesses in Britain's education and training.
He intends to publish a "skills audit" comparing the UK with the rest of the world and a similar comparison of exam results.
A senior Government source said Mr Heseltine wants specific measures to make schools and colleges more responsive to the needs of industry. Mrs Shephard is said to be angry that he will be exposing weaknesses close to an election.
Opposition parties have quickly snatched the advantage. Labour's training spokesman, Stephen Byers, said: "He wants to put Shephard down but it is going to reflect very badly on 17 years of Tory stewardship of education."