At least three quarters of schools in England will see real-terms budget cuts next year, with teaching redundancies expected to follow, funding experts warned this week.

The gloomy analysis came as ministers admitted that the supposedly increased schools settlement they hailed as a “victory” less than two months ago would actually turn out to be a cut.

The analysis by the Institute for Fiscal Studies (IFS) does, however, show that up to a quarter of schools will receive real-terms funding increases next year because of the pupil premium.

Earlier this week, Michael Gove, the Westminster Education Secretary, conceded that an increased inflation forecast meant that most schools would now receive less money in real terms.

“It will be tough for heads in the next year,” he told MPs.

The pupil premium, targeted at the disadvantaged, will amount to pound;430 a pupil, it was announced this week, with pound;625 million spent on the policy in 2011-12, compared to the pound;2.5 billion pledged in the Lib-Dem manifesto.

Russell Hobby, general secretary of the National Association of Head Teachers, said the majority of schools would have less money and would also have to pay for services being cut by local authorities, damning the premium as a “damp squib”.

“I think redundancies from schools will have to follow,” he said.

The IFS says around 4 per cent of schools with high proportions of pupils eligible for free school meals will see real budget increases of 2 per cent or more. But it also states that up to a fifth of all schools will see real-terms decreases of 2 per cent or more.

Mr Gove has guaranteed that no school will receive a budget reduction of more than 1.5 per cent a pupil.

But Luke Sibieta, from the IFS, said this was only a cash guarantee and would allow real-terms cuts of up to 4 per cent.

The institute’s calculations do not take into account the concern expressed by the Association of School and College Leaders that, in 2011- 12, schools will only be funded for seven months of September’s 2.3 per cent teacher pay rise.

After a separate analysis, Malcolm Trobe, the association’s policy director, said that once this and other extra factors were included, some secondaries would be facing real cuts of 3 per cent or more. In an average secondary, that could mean the loss of pound;150,000.

“Heads will be looking at how many staff they can justify,” Mr Trobe said.