From September 2001 smaller pockets of deprivation will get extra funds to help them raise standards, provide extra challenges for gifted children and tackle problems such as truancy.
Burnley, Dewsbury, Walsall, Croydon, West Cumbria, Folkestone and Portsmouth will be first to benefit from the scheme, which will also give them funds to tackle specific local problems.
The decision comes shortly after schools minster Estelle Morris revealed that almost half of low-performing schools were in rural areas.
The Excellence in Cities programme has been extended to include 10 more urban areas: Sandwell, Hounslow, Wolverhampton, Oldham, Barnsley, Doncaster, Luton, Blackburn, Enfield and Blackpool.
Nearly a third of all secondary children, (870,000 pupils) will be covered by the extended scheme.
Education Secretary David Blunkett said: "Excellence in Cities is making it easier for teachers to teach, with the right support.
"As well as expanding the geographical coverage of the programme, we have been looking at ways to expand its scope."