Brooklands College had been planning a £96m expansion but is now preparing to shut its Ashford campus in July 2010 after losing £10m when the LSC retracted funding allocated through the Building Colleges for the Future programme.
The college is also going to stop offering A levels at its Weybridge site, in a bid to recoup costs.
Surrey County Council's lead member for children and learning, Peter Martin, said he wants to meet with government ministers to demand that they step in and avert the crisis.
"The proposed closure of the Ashford site is most serious. More than 1,000 students in an area with higher than average Neets have now lost the opportunity for modern vocational learning facilities in the heart of their community," he said.
Martin added that the government is placing the council in the undesirable position of having to "pick up the pieces" of the LSC's financial disaster, when the council takes on responsibility for 16 to 19 education and training in April 2010.
Earlier this year, the LSC had to suspend the Building Colleges for the Future programme after agreeing to fund more projects than it could afford.
An independent review for the government found the crisis was "predictable and probably avoidable".
