The fight to stay ahead of the state sector is leading independent schools to spend more than ever on teachers’ salaries, new equipment and buildings, according to the Independent Schools Information Service.

The average cost of a private school education is about pound;2,300 this year, up from pound;2,162 in 97-98. Despite the price increases, demand for private education is still buoyant.

The number of pupils in ISIS schools last year increased by 0.7 per cent, notwithstanding the loss of funding for about 1.5 per cent of pupils on the axed Assisted Places Scheme.

Eton College charges boarders pound;15,660, up 12 per cent on last year.

Harrow’s fees have risen by 13 per cent to pound;16,110.

Many of the less fashionable private schools have set the trend for accelerating fees. In 1994, fee inflation was running at 4 per cent. Last year, it was 5.7 per cent and latest estimates show a rise to 6 per cent in 1999-2000.

In the same period, the Retail Prices Index fluctuated from 2.4 per cent in 1994, to 2.8 per cent last year, plunging to 1.1 per cent in September.

Dick Davison, ISIS spokesman, said the increase was due to the wage bill.

Teachers’ pay accounts for 70 per cent of the cost of running a school. This year’s national pay settlement was only 3.5 per cent, but private schools are paying more to retain experienced teachers.

“There has been a great deal of building and investment in equipment that has been needed,” he added.

Mr Davison said that private school fee increases had rarely been in line with retail price inflation, staying much closer to average earnings figures.

Average earnings have increased from 4.2 per cent last year to 4.9 per cent this August.