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The Association of Scottish Colleges called for further education bursaries to be removed from local authority control as Scottish local government faces reorganisation. The association fears that spending will "haemorrhage away" when nine regional education authorities are replaced by 29 single-tier councils next April.

The present system, where education authorities have discretionary powers to award bursaries to full-time students on non-vocational courses, will become unfeasible, it warns, as the new bodies determine their own discretionary priorities.

The ASC believes that bursaries are already a low priority. Although the Convention of Scottish Local Authorities has issued guidelines, the ASC says that education authorities have tried to contain spending by introducing closing dates after which no student can apply, and cutting the length of bursary support. It wants current spending on bursaries to be maintained, and Ray Baker, the chairman, has written to Michael Forsyth, Secretary of State for Scotland, proposing that bursaries be run by the Student Awards Agency for Scotland.

The agency is already responsible for administering grants and bursaries, and has strong links with the further education colleges.

The ASC is less enthusiastic about the colleges administering the bursaries. Mr Baker says that the ASC, working with the Scottish Office Education Department, would be able to provide national guidelines and recommend bursary rates. The colleges would face a considerable challenge.