Many thanks for the numerous replies - all very useful.
Just to clarify, all our colleges are spread out over the UK, we are not on one Campus, as most colleges are. Previous each College had its own server running its own Moodle. Whilst this allowed for fast file transfer in-house, it made my job of maintaining over 9 sites pretty horrific!
We therefore came to the conclusion that using 1 Moodle site would be easier to maintain and also ensure students across the country got the same 'Moodle treatment'. But, as stated, this has some potential knock-on effects due to bandwidth restrictions.
The large files we are referring to are, on the whole, Logic Projects - not MP3s. Alas these sometimes have to be 500mb+.
We think we have found a solution! (Well, my IT guy has). Using the internal servers in each college, he has setup a link used AFP (I think that's right) so that students will click on a web-link and drop work into a local folder on their server. This will then be backed up via a mirror on a regular basis.
Whilst tutors wont be able to download these projects from home (and that alone would throttle bandwidth) they will be able to quickly grade and assess work in house and, if they need to mark work from home, they should be using flash drives.
So we think we've resolved it! Many thanks for all your thoughts and comments tho
Dan