The Association of Colleges welcomed the proposals outlined in the letter.
"We're happy with this statement of principles, particularly the emphasis on the money following the learner and a national funding formula," said Julian Gravatt, director of funding at the association.
"What we're now keen to ensure is the government clarifies who does what and at what level - local, regional or national."
A consultation setting out the government's proposals in full is expected in early 2008.
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