The free school meals measure of pupil deprivation used to decide school funding should be dropped in favour of a system based on classroom behaviour and parents' education, say campaigners.
Schools with a larger number of badly behaved pupils and poorly educated parents should get more cash, they will say at the annual conference of the lowest-funded education authorities in England, the F40 group.
The group argues that the current crude measure of deprivation, based on the number of children claiming free school meals, and low birth weight, means hundreds of schools miss out on money they need to support vulnerable pupils.
The main topic of discussion at the conference will be the review of the dedicated schools grant to address funding inequalities, which can be as much as Pounds 3,000 per pupil per year.
Consultation on the review has ended and ministers could decide on changes by the autumn.
In its submission to accountants PricewaterhouseCoopers, appointed by the Government to gather evidence, the F40 group suggested that as well as using census data on parents' educational achievements and school records of pupils' behavioural or emotional problems - which correlate strongly with deprivation - pupils' school attainment levels should form part of the deprivation measure.
The F40 group recently had a meeting with PwC and group chair David Kidney, a Labour MP, said he was pleased with the review's progress.
"We weren't sure they (PwC) would have a grasp of what the issues are, but they came through the test well," he said. "It's not enough for us to say it's not fair: we have to take a constructive approach. It's insulting to say every child who claims free school meals needs extra attention from teachers or has a greater educational need.
"A sensible approach would be to base funding on underachieving."
In its submission to PwC, the F40 group says free school meals should be viewed as a "simple offon switch" and that its use to measure poverty does not distinguish between those in great need and those whose parents' income dips just below the eligible level.
Schools Secretary Ed Balls will be the main speaker at the F40 group's annual conference tomorrow (March 21) at the National Coal Mining Museum, Wakefield.