The greater the level of disadvantage the more marked the variation in their funding, inspectors said in a new report Improving City Schools.
They analysed nearly 1,000 schools nationwide with good national test and GCSE results where more than 35 per cent of pupils were eligible for free meals.
Primary funding varied from pound;1,417 to pound;3,164 per head while secondary funding ranged from pound;1,977 to pound;3,070 per head.
But the report said there was a lack of data on funding received from sources such as the Standards Fund, business sponsorship, European Union funds, local fundraising and regeneration and other grants.
The Office for Standards in Education will now produce a disadvantage index with a new formula for allocating extra funding to individual schools.
It will reflect factors which demand exceptional amounts of staff time and expertise, teaching materials and building main-tenance. It will also take into account the numbers of pupils with non-statemented special educational needs and pupil turnover.
The Government is now reviewing funding and a Gree Paper is expected in the summer.
Inspectors found that successful schools devoted more time to teaching, with effective secondaries teaching an extra 30 minutes per week than the average for schools with similar intakes.
Successful schools had more even teaching quality and were also significantly better at matching staff to the curriculum than less effective schools.
They also made greater use of non-teaching staff and provided training and support for breaktime supervisors, home-school workers and classroom assistants. The more effective schools excluded more pupils than the national average, but fewer than other schools in similar settings.
A scheme for disaffected 14 to 17-year-olds has encouraged many teenagers to continue in education or training, according to a new report by OFSTED.
Their evaluation of the New Start initiative found that most of the Year 11 students taking part in the projects took GCSEs where they had earlier been expected to opt out of exams altogether.
OFSTED has also highlighted the lack of a clear policy on family learning, saying only a small number of councils offered value-for-money programmes.
The reports are available on www.ofsted.gov.uk