NCG - formerly known as Newcastle College Group - has been granted foundation degree-awarding powers, following lengthy scrutiny by the Quality Assurance Agency.
New College Durham has also been given the green light, the Times Educational Supplement reported today.
NCG is now looking to obtain the power to award its own BA and BSc qualifications.
Its chief executive, Dame Jackie Fisher, said: “We are delighted to be able to award our own foundation degrees. Foundation degree-awarding powers creates a platform for us to forge ahead with our plans for taught degree-awarding powers, and gives us the opportunity to provide students with degrees that will give them the skills to get jobs and progress in their careers.”
NCG, which consists of Newcastle College, West Lancashire College and Sheffield-based Intraining, already claims to be the largest further education provider of higher education courses in the country.
There are currently more than 3,500 students taking foundation degrees across the group, which awards degrees through its partners Leeds Metropolitan University, Newcastle University and the University of Kingston.
The group has set its higher education tuition fees at £5,800 per year for 2012, significantly lower than the £9,000 maximum to be charged by many universities.
The new powers will initially be used to allow NCG to validate the 74 foundation degrees offered at its Newcastle and West Lancashire sites.
At present, many of the 250 colleges in England which offer higher education courses are at the mercy of their partner university, which has the power to decide what qualifications they can teach and how many places they can offer.
The QAA’s decision could pave the way for more further education institutions to become awarding bodies themselves.
John Widdowson, principal of New College Durham, said: “We are delighted to have been given foundation degree-awarding powers.
“Given the changes currently being experienced in higher education, we will consider the other options open to us as the situation develops.”
Stephen Jackson, QAA’s director of reviews, said: “After working with Newcastle College and New College Durham and carefully considering the evidence, we were assured about the quality of student experience that each college provides, and their systems and procedures for establishing and maintaining academic standards.”
Bradford College is waiting to find out whether it will be given full degree-awarding powers, while Grimsby Institute and Blackburn College have also applied to offer foundation degrees.
Joy Mercer, Association of Colleges director of education policy, said: “We are heartened by the commitment in the government’s higher education White Paper to make the application process for foundation degree-awarding powers more streamlined.”