Almost all Protestant voluntary grammar schools and a few controlled by education and library boards have preparatory classes charging an average of Pounds 2,600 to each of the province’s 3,400 prep school pupils.

The fees are subsidised by a Pounds 1.5 million annual government grant covering 40 per cent of teaching costs. This is not conditional on admitting low-income pupils.

Tony Worthington, the education minister, has announced a cut in the subsidy to 30 per cent of teaching costs. He said this would save about Pounds 230,000, enough to create an extra 230 nursery places in line with Labour priorities.

Even though this was less severe than his original proposal to move to 20 per cent, it caused a storm at the Northern Ireland Grand Committee, made up of all the province’s Westminster MPs.

He was roundly attacked by an alliance of Unionist MPs, supported by the Conservative MP, Malcolm Moss - despite the fact that the Tories cut the subsidy in 1994, the year Mr Moss became a Northern Ireland minister.

Criticising the current move Mr Moss said that if 10 per cent of pupils dropped out of prep classes, there would be no savings because they would cost Pounds 1,400 each in primary schools. “He will not make any savings. It is economic madness,” he told the committee.

Peter Robinson, Democratic Unionist MP for East Belfast, argued that there would be a domino effect - pupils leaving prep schools because of the cost would push fees even higher. “It will therefore not be long before the sector collapses,” he said.

Mr Worthington accepted that closing prep schools would mean greater costs to his department. He thought it prudent to reduce the subsidy to 30 per cent rather than 20 per cent, though he refused to rule out further reductions.

Prep schools generally have better facilities than state schools, as well as better staffing. Last year they had 18 pupils per teacher, compared to the 19.8 ratio in primaries.

Public funding has been criticised as contrary to the Government’s policy targeting social need. Last year the official Standing Advisory Commission on Human Rights recommended that this “transfer of money to middle-class parents” should cease.

In an article in the Belfast Telegraph, Professor Bob Osborne, from the school of public policy and law at the University of Ulster, and Dr Tony Gallagher, of the school of education at Queen’s University, noted that there were 15, 000 surplus places in primary schools, due to rise to 25,000 by 2000.

“Any extra pupils going into the primary schools will make them more efficient and save money by reducing the per capita costs.

“We suppose the preps are felt to provide some degree of social cachet. If some people want to buy this, surely it is a matter for them? Why do they want the rest of us to subsidise their choice?” they asked.