Councils have lost nearly pound;200 million of public money preparing for school rebuilding projects that have been axed following the Government’s decision to scrap Building Schools for the Future (BSF).

Many local authorities had spent millions of pounds and a number of years organising their schools in preparation for the huge capital investment promised under the previous Labour government.

But councils say the money has been “wasted” since Education Secretary Michael Gove announced last week that he would be stopping the programme in light of the country’s budget deficit.

The same amount could have rebuilt and refurbished all the schools in Barnet (pound;80 million) and Hartlepool (pound;100 million) combined.

A raft of local authorities, including Liverpool, Lambeth, Camden, Nottingham and Newham, are now considering legal action against the Department for Education following its decision to drop BSF.

According to a “snapshot survey” of three-quarters of local authorities affected by the Local Government Association, more than pound;160 million of taxpayers’ money has been squandered in preparation costs. Walthan Forest lost pound;13 million alone.

But local government sources told The TES the figure was “much closer to pound;200 million”, leaving many council bosses with little option but to consider going to the courts to recoup their losses.

One of the biggest losers was Liverpool, which said it was focusing its efforts on trying to force the Government’s hand in reinstating its pound;350 million contract, but said a court challenge was an option.

Councillor Jane Corbett said: “They’re running us straight over the cliff. We’re focusing our efforts on putting together a plan B. A delegation of business leaders and children and teachers is to go down to London in the next few days to give its perspective. We’re focusing all our attention on this, but we’re still considering legal action.”

Camden councillor Heather Johnson said she had written to Mr Gove “demanding” that the Government reconsider its decision and reinstate the borough’s BSF programme.

“I share the huge and widespread disappointment of our schools,” said Ms Johnson. “They have worked tirelessly over the last four years, including countless hours of school governors’ time and others who work for their schools in a voluntary capacity.

“We are working with other local authorities in protesting about the decision to cancel BSF and also to investigate whether there could be a basis for a legal challenge.”

Nottingham City councillor David Mellen said the city would use legal action where appropriate if it meant “standing up for the city’s schools”.

A DfE spokesman said: “The fact that 67 councils have spent more than pound;160 million simply preparing for entry into BSF, without a single brick being laid in any of these authorities, shows exactly why we had to bring an end to this scandalous waste of public money.

“The capital review which is currently under way will look at all possible options for moving forward. This is not the end of school building, just the end of the wasteful and bureaucratic BSF programme.”

• Original headline: pound;200m of public money `wasted’ by councils in BSF preparations