Universities and colleges have lost millions of pounds because student drop-outs have been double-counted by the Teacher Training Agency, it was claimed this week.

Institutions say they were left hundreds of student places short when the TTA set this year's allocation of student numbers.

The agency deducted numbers to account for drop-outs, even though forecasts by institutions allowed for this. Individual university education departments and teacher training colleges have worked out that they have lost hundreds of thousands of pounds as a result. Across the ÖйúAƬ sector the losses amount to millions, according to the Standing Conference of Principals.

John Cater, principal of Edge Hill College of ÖйúAƬ and chairman of SCOP's teacher education group, said the slip-up over drop-outs was one of several costly changes introduced by the TTA which were in danger of destabilising teacher training.

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The TTA has denied double-counting, and says any disputes over allocations have already been cleared up. A spokesman said there may have been some confusion because predictions were made for drop-outs expected both during the academic year and between years.

But institutions said it was the TTA that was confused, because it deducted numbers for between-years drop-outs not realising this was included in the in-year wastage figures submitted.

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A TTA spokesman said: "If people filled their forms in correctly, then that should not be the case. As far as we are concerned our method for calculating wastage has been cleared from every point of view."

Dr Cater said: "One of the key lessons the TTA needs to learn is that this is one of a variety of policies which individually may have a rationale behind them but cumulatively add up to a cost which could leave teacher education very unstable indeed."

The TTA says institutions have been compensated with "buffer" funds for the impact of "interim" policies introduced during the transfer of teacher training funding from the ÖйúAƬ Funding Council for England.

But teacher training heads have complained that the money has barely met a quarter of their losses.

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Gillian Payne, head of the Rolle School of Education at Plymouth University, said teacher training partnerships with schools were likely to suffer.

"The TTA has not given us the numbers and so our partnership schools will be disappointed. Either they will withdraw support or be left fallow for a year," she said.

* The University of Lancaster will hand Charlotte Mason College to St Martin's College, Lancaster, from the autumn.

St Martin's, an affiliate of Lancaster, has an excellent Ofsted report for initial teacher training, for which Charlotte Mason failed. It will aim to improve the college on its existing site in Ambleside, Cumbria.

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