About 1,500 jobs in Carter & Carter, the troubled training company, have been saved after the purchase of the majority of the group's operations by Newcastle College.

However, shareholders in the company, which employs about 2,200 people and has 27,000 trainees on its books, will not see any return from the sale, which was made under a condition that the price was not revealed.

The deal marks the end of a catastrophic year for Carter & Carter, which began to unwind after the death of its founder, Phillip Carter, in a helicopter crash last May. The company went on to issue three profit warnings and eventually appointed Deloitte as administrator last week after its lenders, Barclays, Lloyds TSB and HBOS, pulled the plug on restructuring talks.

On Thursday the company issued a statement to the London Stock Exchange to inform investors that their shares, suspended since October, are to be cancelled when the market reopens on Tuesday, and that they will be left with nothing.

The collapse of the company, worth £530 million a year ago, will hit thousands of members of the Corus/British Steel pension scheme and Fidelity International, its two biggest investors.

Carter & Carter's latest accounts, for the year to July 31, remain under investigation by forensic accountants and two City law firms.

The company, which operates at more than 100 locations in Britain and abroad, provides vocational training and employability skills training, primarily under government-funded contracts, as well as back-office functions for the automotive sector.

Nick Dargan, a partner in Deloitte, who oversaw the sale, said yesterday that the sale of a substantial proportion of the group to Newcastle College was “a very good solution”.

Mr Dargan said that his team had tried to ensure that as many of Cater & Carter's employees as possible kept their jobs and that people training with the company were not affected.

He added that sale proceeds would go towards repaying a “significant element” of the company's debt and ensuring that employees were paid.

Mr Dargan said: “There were a number of interested parties, but no one that would take the majority of the group. The real danger was that if the business continued for a few more weeks there would have been little value left.”

Mr Dargan said that training provided by parts of the group that had not been sold, such as its apprentice learning unit, would be taken back in-house by the likes of Volkswagen and Ford or transferred to other businesses.

A spokesman for Newcastle College, the UK's largest further education institution, said that the company's administrators had made it and similar organisations aware of the availability of parts of the business. The purchase fitted the college's strategy of becoming “the training provider of choice for business”, he added.

Jackie Fisher, the college's principal and chief executive, described the deal as a good opportunity to draw on the strengths of both organisations. The acquisition will expand the college's geographical reach and allow cost savings because of the similar nature of training that the two groups provide.

The deal will push Newcastle College's annual turnover to about £150 million and comes after the acquisition of TWL Training and its merger with Skelmersdale and Ormskirk College in Lancashire last year.

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