David Blunkett, the Education Secretary, pledged last year to reverse years of underfunding in response to a TES campaign to save school music.
But as many as 40 councils could receive no money because their music services have been turned into charitable trusts which are "invisible" to the Government's number crunchers. Others will lose out because they have scrapped music lessons altogether and can't afford to contribute towards setting up a new service.
The amount of money to be allocated to local authorities which submitted bids for the specific music grants in December will be announced later this month. It will probably coincide with the full-scale launch of the Youth Music Trust, set up by Chris Smith, the Culture Secretary, last summer.
However, Graham Lane, who chairs the education committee of the Local Government Association, fears that many authorities, including his own, the London borough of Newham, will lose out on the deal.
Newham, in common with many authorities, transformed its music services into a charitable trust outside of the general schools budget in order to protect it from delegation to schools. The Department for Education and Employment is not taking account of such trusts in allocating grants.
Moreover, while the grants will allow local authorities to set up services from scratch, this will be on the basis that councils contribute half of the money - which many cannot afford.
Andrew Panton, Newham's deputy director of education, said it was ironic that the borough stood to lose as it had taken steps to protect the service from fragmentation.
Michael Wearne, Federation of Music Services chairman, while welcoming the initiative, pointed to another worry. He fears that local authorities will take the new money, withdraw existing funds and spend them elsewhere.