LEADING figures at Exeter College have called a Government's quango's decision to withdraw funding from a merger deal a "betrayal of trust".

The Learning and Skills Council (LSC) has pulled out of a plan to help fund a federation between Exeter College and Bicton College.

Bicton would have become part of the Exeter College group as a wholly-owned subsidiary. It would have retained its own identity and kept its name.

But Exeter College received a letter from the LSC saying it would now be unable to support the proposal through investment of around £3m to cover previous losses incurred by Bicton. Instead, it proposed Exeter should handle the debts.

The governors and principal of Exeter College, Richard Atkins, have revealed they have rejected the LSC's proposal and will withdraw from the federation at the end of the week.

Mr Atkins said: "It is outrageous that, on top of the £1.25m that Exeter College was already committed to investing, the LSC is forcing Exeter College to repay Bicton College's previous debts and has done this without advanced notification or consultation.

"If we responded to the LSC's demands many important building works for our students will be jeopardised."

Recording his "dismay at the betrayal of trust", Philip Jenkinson, chairman of Exeter College's governors, said: "So far the LSC has failed to identify any alternative proposal that would cost the public purse less than the £3m that is required to safeguard the federation. I would urge the LSC to reconsider its position."

An LSC spokesman said: "We are continuing to work with both colleges to ensure a long- term solution can be reached."