Building schools for the Future (BSF), one of the Labour government's highest profile education polices, is expected to be scrapped by the Government, The TES understands.
The vast #163;55 billion project, which aimed to rebuild or refurbish every secondary school in the country by 2020, looks likely to be wound up. Meanwhile, the quango that ran the scheme, Partnerships for Schools (PfS), will be redirected to help with capital projects for those institutions that opt to become academies and also to find premises to aid "free schools".
Although the future of BSF is yet to be settled, it is understood Tim Byles, chief executive of PfS, is now working closely with new Education Secretary Michael Gove.
Speaking to The TES last week, Mr Gove said the Government was "anxious to ensure we use existing machinery wherever possible, in order to ensure a smooth transfer of funding", and so it is expected PfS will remain to take care of schools capital projects on a case-by-case basis.
It is believed new academies will be able to bid directly to the Government for grants for capital projects. Last week the Government introduced into Parliament a bill that would give all "outstanding" schools pre-approval to become an academy.
A PfS source said: "There is a lot of anxiety at the moment. People want clarity on what will happen. It is thought that PfS will be used to help find premises for free schools. And if a number of schools opt out of local authority control, it is expected those schools would go direct to PfS for any capital projects."
PfS will have "frameworks" of pre-approved architects and contractors, which would then bid to carry out certain projects as and when they came up.
It is also believed that the Government might be willing to relax its current stance on which BSF projects will continue.
Ahead of the election, new schools minister Nick Gibb said that any BSF deal that had not reached "financial close" was not "guaranteed", but this is now expected to be extended to BSF projects that are less advanced.
John Dunford, general secretary of the Association of School and College Leaders (ASCL), said he expected the Government to make the schools capital programme far more economical, adding that his members were "very anxious" about the future of BSF.
"During my 16 years as a headteacher the school building just got worse and worse and worse," Dr Dunford said. "Huge credit is due to the Labour government for addressing the 20 years of neglect that took place from 1979 to 1999.
"But due to the way BSF was allocated, local authority by local authority, there is still a considerable number of schools with very poor buildings, which have the misfortune of being in the wrong borough. I would like to see these schools made a priority, while carrying out the BSF developments that have already been promised."
The coalition made no mention of capital expenditure in its first official week of government last week, stating that a decision will be made on all capital projects in due course.
A Department for Education spokesman said: "The Department for Education has not yet made a decision on Building Schools for the Future funding or any other capital programmes.
"The Government is committed to a full comprehensive spending review in the autumn and ministers will shortly be considering their spending priorities, which will take into account all areas of spending, including school capital."