Colleges are receiving improper cash windfalls by selling off inherited land earmarked for educational use, according to a campaign by Tameside Borough Council.
The council is campaigning for amendments to legislation to ensure that all land deemed surplus to colleges' requirements should be returned to local education authorities.
It claims land that was transferred to colleges in 1992 has not been properly used. The council is campaigning to change the Further and Higher Education Act of 1992, to guard against abuse of the land.
But the Association of Colleges has pledged to "vigorously resist" any attempt to change arrangements. It says colleges require FEFC consent before they can sell assets and that this "would normally be given on the basis that the proceeds will be reinvested in the college estate".
It also says: "Tameside appear to be unaware that government is encouraging colleges to rationalise their estates, to dispose of surplus property and to re-invest in upgrading and enhancing the facilities which will be retained."