Training and Enterprise Councils will be given a high priority by the new Department for Education and Employment but could face some substantial restructuring, according to James Paice, the minister in charge of training strategy.

Although the merger of the education and employment departments has long been called forby the business sectors, TEC directors are fearful that education will be given precedence over training and that further education colleges will have the advantage in funding applications.

The appointment of Gillian Shephard, a former secretary of state for employment, has raised the hopes of many TECs that there will be a level playing field between the funding of college-based and work-based training.

Addressing TEC executives at the annual conference in Birmingham, Mr Paice offered further comfort, revealing: "I am 100 per cent committed to the TEC movement".

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He said that TECs will be given considerable operational freedom, as befits the original concept of "private companies run by local business leaders".

But he warned that TECs will have to "accept the need periodically to review whether your present structures and indeed boundaries are right".

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Mr Paice expressed concern that TECs are not fully representative of the business communities in their local areas.

He also said that TECs had a poor record of involving local MPs. "I must ask all of you to search in your hearts and ask whether you are doing enough," he said.

Another hurdle for TECs will be obtaining a government licence to operate. Only 25 have received this all-important permit, and Mr Paice said that licensing standards will not be relaxed and that many TECs can expect to be disappointed in their initial application.