Heads of sixth form schools and colleges are considering legal action against the government funding agency after a funding error, meaning cuts of over £200m to their budgets. There was uproar when, last week, the Learning Skills Council sent a letter to inform sixth forms and colleges of cuts of up to £200,000 to their individual budgets.

Schools are seeking legal review of the way in which the Learning Skills Council handled the cuts, since the reason given - that there are more students enrolled on courses than was initially expected - was known to the Council as early as January.

The Education Secretary, Ed Balls, is already under pressure to explain the confusion over funding, which college principals and headteachers believe could alter his plans to introduce new Diploma qualifications this September.