Tony Blair could face further dissent from Labour MPs over new reforms to further education colleges based on the controversial "trust school" proposals which divided the Labour Party.

Labour MP Lynne Jones (Lab Selly Oak), who opposed the changes to schools, said: "If the plan is to let businesses take over colleges, it will be controversial."

A new White Paper has set out plans to allow colleges to form trusts with businesses.

Trusts are charitable bodies involving third parties such as industry, charities or universities.

Plans to let them run schools led to a major rebellion among Labour MPs in a House of Commons vote this month.

Mr Blair's Education Bill was saved from defeat only because Conservatives backed the proposals and voted with the Government.

The schools proposals have now been extended to further education colleges.

Trusts will be able to bid for the right to create new colleges as the number of students in further education expands, and may be invited to take over failing colleges.

A single trust could run both schools and colleges, the White Paper said.

There was no mention of the possibility of churches or other religious groups forming trusts, one of the most controversial aspects of the reforms.

Dr Jones said: "Some employers' groups such as the Engineering Employers Federation already work closely with colleges and this is very important.

"The question is whether the White Paper expands on this or changes the nature of colleges."

Worcester MP Mike Foster (Lab), chairman of the All Party Parliamentary Group of Further Education, said: "This White Paper has the ambition of achieving excellence especially for those whom the traditional school system has failed."