Darlington College of Technology's annual budget has been reduced by about £600,000, forcing it to cut up to 40 jobs and hundreds of student places.

The principal has warned the cut - part of a national redistribution of funding from the Learning and Skills Council (LSC) - could be 'devastating' to the community.

From August 1, the college will discontinue several adult learning courses, at the expense of 1,300 student places. About 40 staff will lose their jobs.

Tuition fees on several courses will be raised by more than ten per cent in an attempt to make up the shortfall. The college has also been forced to revise its 2005-2006 prospectus.

The LSC says that nationally its has increased further education funding by £170m next academic year. But several other colleges in the region have also fared badly, including Bishop Auckland College, which has a £500,000 shortfall and will be forced to cut about 3,000 student places.

Sarah Farley, principal and chief executive of Darlington College, said the announcement had been made 'doubly hard' by the recent excellent inspection rating by Ofsted.

"These decisions are being forced upon us, and the outcome will be quite devastating for the local community, as the courses we will have to cut are currently enjoyed by large numbers of local people," she said.

"People can come here and develop their skills and knowledge and increase their aspirations.

"That supports not only the economic development of the town, but also the social infrastructure.

"The majority of our staff live within a 20-mile radius of the college, and the job losses will have an impact locally, although we are hoping they will be on a voluntary basis."

The college, in Cleveland Avenue, plans to move to a £35m site in Haughton Road next year. Ms Farley insisted this would be unaffected.

The college also has a campus in Catterick, but Ms Farley said it was not known to what extent it would be affected.