Proposals to cut spending on further and ÖйúAƬ by handing much of the cost over to students, their parents, and employers, have been considered by the Treasury, it was revealed this week.

The plans are contained in a document which details ways in which the welfare state could be privatised. The document, leaked to The Times, suggests that growing demand for post-16 education means the state will no longer be able to fund it into the next century. The private benefit to individuals participating in further and ÖйúAƬ exceeds social returns on the investment, it argues.

In place of the present system, it proposes the introduction of vouchers for sixth formers, extended loans for students, and contributions to the cost of ÖйúAƬ from employers.

David Blunkett, shadow education and employment secretary, immediately condemned the document as proof that the Government believed a high standard of post-school education should not be available to all.

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"Where Labour is reviewing maintenance post-16 to make a better use of resources to enable more young people to stay on at school and invest in jobs, education and training, the Tories want to cut spending so that the numbers staying on are reduced," he said.

A Treasury spokesman said the document had been written by a junior official and was not intended as a policy paper.

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"It does not look at options for change but at scenarios which may occur in ten to 15 years' time when a Government of a different complexion may be in place," he said.

John Barnes, lecturer in political science at the London School of Economics, suggested the proposals for ÖйúAƬ were similar to those drawn up by an LSE team and submitted to the Treasury.