Software manufacturers have warned the Government against allowing schools to buy peripherals and other products with electronic learning credits (ELCs).
Charles Clarke, the Education Secretary, has been urged by teachers to relax the rules to allow the greater flexibility many want.
The credits can only be spent on software specifically created for the classroom, excluding other types, as well as online resources and related products such as data-loggers and personal digital assistants.
A Department for Education and Skills (DfES) spokesperson said no changes were being considered as TES Online went to press, but it is possible Mr Clarke will make an announcement at the BETT exhibition at Olympia in London next week.
Ray Barker, director of the British Educational Suppliers Association (Besa), warned that Mr Clarke will incur "the wrath of the industry" if he changes the rules.
The educational software companies depended on the pound;280 million in learning credits being spent only on programs, he said. "If the Government wants cutting-edge software to be developed the only way to get firms to invest is by creating a market for it."
While there is an argument for including peripherals in the scheme (data-loggers, for example, work with classroom software), Barker added:
"We must get the message across that learning credits are not the only source of ICT funding."
He said schools may not like being told how to spend money, but applauded the DfES's policy and hoped it would not be altered.
Paul Kelley, head of Monkseaton community high in Whitley Bay, Tyne and Wear, said schools should be given more freedom in deciding how to spend ELCs.
Some companies also want to see the rules relaxed. One is Data Harvest, which makes educational data-logging and control systems. Sales director Barbara Higginbotham said its hardware and software does not meet the rules for Curriculum Online. "ELCs make it difficult to sell essential interfaces and sensors to schools, as funds are not readily available," she said.
"Primary schools in particular are telling us that they have enough curriculum software and that they need curriculum peripherals."
Steve Bacon, general secretary of educational ICT association Naace, said there was considerable pressure on the DfES to make learning credits more flexible. He said the association believed the credits were vital to improving the quality of educational software, but acknowledged that some products required spending on peripherals as well. "We have no problem with that, but if it's another way of funding hardware in general we would be far less happy," Bacon said.
However, the DfES may find it difficult to make changes to ELCs following the European Commission's recent decision to approve the BBC Digital Curriculum initiative. It ruled that the broadcaster's scheme distorts the educational software market, a factor only mitigated by the ELCs. The commission added that the credits must be used exclusively on genuine educational software.
RM, the educational technology company, said the decision underlined the need for ELCs to continue for the duration of the Digital Curriculum. It is currently scheduled to launch in 2006, just as the three-year ELC scheme is due to wind up.
RM led the industry's battle against the BBC, but Phil Hemmings, its corporate affairs director, said the European Commission decision drew a line under the issue. The company was now confident a market would continue to exist even if ELCs do end and would begin investing in product development again. "Things are looking positive and we are considering where to invest," he said.
Meanwhile, the DfES will launch a new marketing drive for ELCs along with a major revamp of the Curriculum Online portal at the BETT exhibition.
The portal has been redesigned to make searching the 20,000 multimedia resources easier and more teacher-friendly.