A row broke out on Friday over potential changes to education funding amid concerns it could restrict the number of A-levels pupils can take.
Ministers are said to be considering proposals to introduce a single funding rate for all students, intended to cover the cost of three A-levels or a vocational qualification, such as a BTEC, at the same level, the Times Educational Supplement (TES) reported.
But school and college leaders warned the move could mean that teenagers are limited to taking three A-levels, which would make it harder for them to compete with private school pupils for places at top universities.
The Department for Education responded by insisting there will be "nothing to stop" schools and colleges from entering pupils for more qualifications.
Under current funding rules, colleges and schools are typically funded based on previous numbers of students and the types of qualifications they offer. There is also extra money for specific areas, such as core maths and English qualifications and for disadvantaged students.
The system is considered extremely complicated, and the Government has been considering ways to simplify it and make it fairer. A consultation was published last October looking at ways to deal with the issue.
According to the TES, a move to a single funding rate intended to cover the cost of a set number of qualifications is the favoured option.
It is likely that there would still be extra money for poorer students and other key areas like maths and English.
Martin Ward, deputy general secretary of the Association of School and College Leaders, told the TES that the new funding rules will come on top of cuts already faced by schools and colleges teaching 16 to 19-year-olds in the last year.
"All colleges and schools have at least some students who are doing a larger than normal programme of A-levels," he said.
"If that's not funded it will work against social mobility."
Julian Gravatt, assistant chief executive of the Association of Colleges, said that the Government needed to publish its funding plans so that they can be discussed.
"We are keen to see the curriculum justification for any reforms on both the academic and vocational side and a more open discussion about the plans," he said.
Gravatt added: "If you want to get people into selective institutions they might need to do more qualifications."
A Department for Education spokeswoman insisted that a move to limit A-levels was not true.
"There will be nothing to stop schools and colleges from entering outstanding pupils for more than three A-levels," she said.
"There should be no caps on aspiration. We will be announcing details of the new 16-19 funding arrangement shortly."