Under-performing colleges that fail to turn themselves around will face "firm action" the Secretary of State for Education Alan Johnson warned yesterday.
Mr Johnson stressed the need for "under-performers" to raise their game over the next two years. Measures introduced in a Government White Paper on further education earlier this year will give local Learning and Skills Councils the power to dismiss principals at failing colleges.
But the Association of Colleges, which represents college leaders, claimed the move was unnecessary as most colleges were achieving and were able to govern themselves.
Speaking at the Association of Colleges conference at the ICC in Birmingham yesterday, Mr Johnson said: "We must push for greater improvements among under-performers and we must eliminate complete failure by 2008 at the least.
"Of course we will do all we can to help poor performers to improve and the improvement notices will help, but where continuous efforts fail, firm action must, and will be taken."
In the West Midlands, Sandwell College has been given until next September to improve or face sanctions, including possible closure.
But Dr John Brennan, chief executive of the AoC, questioned the need to put additional threats on colleges.
"The quality of college provision is extremely high. In 2005/06 Ofsted judged 99 per cent of college to provide satisfactory or better provision," he said.
Julian Gravatt, director of funding and quality for the AoC, also criticised giving the LSC the power to axe college principals.
"In cases where colleges are failing, governing bodies do that already," he said.
"This introduces a new level and goes beyond similar powers for schools. We have advised the Government against doing this."
Mr Johnson also called for a "new relationship" between colleges, employers and learners.
He said businesses needed to be more involved in shaping "training, funding courses and creating additional qualifications".