Opposition peers say the new learning and skills bill will aid a fundamental shift in political power in England.
But while Conservatives believe it is paving the way for devolved regional government, the Liberal Democrats see it as centralisation by stealth.
Baroness Blatch, Conservative spokeswoman for education and employment in the Lords, said that the bill furthers the government's intention to devolve political power to the English regions.
Baroness Blatch said that the bill, which sets up a national and 47 sub-regional learning and skills councils (LSCs), is a top-down drive to undermine county councils and local education authorities so as to boost the power of the eight regional development agencies.
She said: "[The bill] is very definitely paving the way for regional government. Local authorities will be sidelined while RDAs' influence increases. We will wake up in two or three years to find that all that needs to be done for fully fledged regional government is to remove the remaining powers from county councils."
The RDAs - there will be nine when London's comes on stream later this year - are powerful bodies with responsibility for planning regional economic strategies.
Local LSCs' role will include assessing local skill needs and drawing up action plans. The Learning to Succeed white paper, which preceded the bill, said that the local councils will be expected to consult with RDAs and support regional economic strategies, which will be developed by RDAs. The national LSC must approve the local LSC plans after again consulting the relevant RDAs.
The Liberal Democrats support the devolution of power to the regions and agree that the proposed LSCs will undermine the power of LEAs. But the party does not share the Conservatives' belief that the bill is designed to pave the way for devolved regional government but rather that it will concentrate power in Whitehall.
Baroness Sharp, the party's higher education spokeswoman in the Lords, said:
"The national council is a quango and is a way of getting rid of local education authorities by stealth. It is a prelim to the whole education sector being run by a national quango."
The bill is due to begin its report stage in the Lords next Monday. The government has announced the location of the 47 local LSCs. Higher and further education minister Baroness Blackstone said that where practical they would be housed in existing training and enterprise council offices. From April 2001, TECs will cease to exist, with their funds transferred to the national LSC.
For LSC locations see www.dfee.gov.uk