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The Colleges Employers Forum conceded the first round in merger talks last week with the rival Association for Colleges.

A joint committee set up to agree terms for the proposed merger was without a chair after the CEF's nominee - Ken Ruddiman, principal of Sheffield College - was rejected by AFC representatives. The AFC insisted on an independent chair.

Mike Austin, principal of Accrington and Rossendale College and chair of the AFC, said a chairperson from outside the sector would be free of "baggage" and therefore more impartial. "The merger is seen as a well-timed attempt to bring sense to a difficult situation. FE was not seen to be speaking with a single voice and that was thought by some to be negative," he said.

Mr Austin said the style of operation of the two groups had been very different and this was one issue to be resolved.

Gillian Anslow, chief executive of Guildford College and CEF representative on the merger committee, said: "One of the first things to be worked out must be a timetable."

The joint merger committee, consisting of three members from each group, will agree precise terms including the treatment of assets and liabilities. It will also agree interim arrangements for collaborative work.