The move would result in more than 90 per cent of education money being handed over to schools - about 5 per cent more than at present.

Councils would retain little say over school funds, and dramatically reduce their power base - education makes up the lio’s share of their budgets.

Department for Education and Employment civil servants are proposing a clear division of spending between schools and LEAs. Controversially, new “schools forums” of elected headteachers and governors would be involved in decisions about funding where responsibility was shared with LEAs - for example, for special educational needs.