Stephen Dunmore, chief executive of the New Opportunities Fund, said: "The money is certainly there if schools want to bid for it. Some people are very keen on the idea while others argue it would be divisive to pay some teachers to take part in a particular project while others do similar work voluntarily. "
Speaking at a conference on the New Opportunities Fund and out-of-hours learning, he added "Schools or consortia of schools will have to make a decision about whether they want to include teachers' salary costs in their bids. We will assess the bids on their own merits."
Bids will be invited early next year for a share of Pounds 180 million of lottery cash set aside to establish after-school activities.
But a report on 12 pilot projects established in January 1997 and funded by the Department for Education and Employment revealed that some schools had found it difficult to recruit staff and maintain enthusiasm for after-hours work.
Education Extra, a foundation promoting after-school activities, reported that the schemes had boosted pupils' skills, but that some project leaders had expressed concerns about the impact on staff.
Kentish Town primary school in north London, which piloted a maths project, emphasised the pressure on staff, and told researchers: "It was a huge amount of work. It needed continual enthusiasm."
Secondary schools reported difficulties in recruiting enough staff for after-hours schemes, while others said that initial enthusiasm had quickly dwindled.
Bob Jennings, director of community development at St George Community School in Bristol, which piloted a homework project, said: "After-school clubs cannot really take off until they pay teachers in the same way that other professionals are paid. The whole system is being run off the backs of young teachers who are desperate to get on in the profession.
"It seems very unfair that you can pay a judo instructor Pounds 20 an hour to come after school while in the next classroom an exhausted young teacher who has already taught a full day is doing something similar for free."
Efforts to involve parents in out-of-school projects often failed to reach the families most in need of support, said the report.
Several schools who piloted schemes found parents with literacy problems would not join in, telling teachers they lacked the confidence to participate.
Others reported that some families feared they would be stigmatised by being seen to attend a parents' group.
One school aimed to resolve this by establishing a separate entrance for parents' classes so participants were less likely to be seen by other parents.