Colleges charging less than £6,000 a year in tuition fees will be free to recruit more students under government proposals that could lead to a new generation of polytechnic-style institutions teaching vocational skills.

A forthcoming white paper is expected to herald the expansion of employer-focussed education in courses ranging from engineering and social care to zoology and graphic design.

Further education colleges could form a new generation of polytechnics – although the term is unlikely to be revived – offering a "no frills" alternative to the classic university experience of spending three years away from home.