Ministers have postponed the overhaul of local authority finance until 2003, despite admitting that the current system creates disparities "which are not justified by the education needs of children".
A Government briefing paper to Labour MPs, seen by The TES, adds that ministers have no plans to help out poorly-funded councils with a one-off grant while reforms are considered. An insider said the delay came after ministers took fright at the prospect of introducing a basic funding entitlement for every pupil in the country.
The move was greeted with anger by f40, a group representing schools in the 40 worst-funded authorities.
Currently schools in some well-funded areas, such as London, receive thousands of pounds per pupil more than those served by less well-off councils.
Peter Clarke, chair of the group and leader of the Labour group on Gloucestershire County Council, said: "Ministers have had five years to look at this problem. Now it's going to be mid-way through this Government's second term, at least, before we are anywhere near a solution." Mr Clarke said that, of the 16,000 responses to the Green Paper on council funding the Government published last year, 14,500 had been in support of f40's campaign.
The Office for Standards in Education and the Audit Commission produced a joint paper backing an "activity-led" funding system, guaranteeing a set level of funding for pupils at each key stage.
Another factor behind the postponement is understood to be that ministers are keen to focus on post-16 funding changes.
Local learning and skills councils take control of the funding of school sixth forms in April 2002. Reforming the funding of pre-16 education would have made it harder to gauge the effect of post-16 changes.
Alan Parker, education director in Ealing, west London, and a member of the working party looking at funding reform, denied there had been "political" reasons for the postponement. He said the timescale was too tight for changes to have been made by next May. The delay would also allow changes to come in alongside reforms of the rest of local government finance.
A spokesman for the Department for Transport, Local Government and the Regions, which is overseeing the changes, said: "We felt that bringing in these changes for 2002 was too early. For that reason, we have set this date of 2003-4."