The finances of Halton College in Widnes, Cheshire, have been under scrutiny since early last year following allegations of financial irregularities. The Further Education Funding Council called in a team of independent auditors.

The Principal, Martin Jenkins, and Deputy Principal, Jenny Dolphin, are suspended pending the outcome of the inquiry. It is understood they deny the allegations of financial irregularities.

The inquiry report is due to be published next Thursday, and a spokesman for the funding council declined to comment before then.

But it is expected to highlight irregularities over the way the college claimed funding for some students, and to criticise foreign business trips made by senior staff and the college's expansion of courses for overseas students.

'Unlimited' expenses

Some £9m will have to be paid back to the funding council for the period 1994-98.

A former manager at the college told Channel 4 News anonymously that he had taught students a one-hour course, for which the college had claimed 16 weeks' worth of funding.

Expenses were in effect unlimited, he said, for the first two years following the removal of local authority control from further education colleges.

There were claims for students living in Scotland, who were not entitled to grants in England.

Job losses

The college is making redundant 170 staff, about a third of the total, in an effort to save £1.5m - a move which it has said is not connected with the inquiry.

The acting principal is on holiday this week and the college invited questions about the matter in writing but has so far not answered them.

This is the latest scandal to have damaged the image of further education. Last month the National Audit Office said the running of Gwent Tertiary College in Wales had fallen "well short" of the standard expected, leading to an overspend of almost £7m between 1996-97.