Labour has pledged an unprecedented pound;550 million to rebuild every faith secondary school in England, reversing a 60-year rule which requires churches to contribute to building costs. It is the first major concession to faith schools by Ruth Kelly, the Education Secretary, who is a Roman Catholic.

The decision has outraged secular groups who accused her of using taxpayers’ cash to promote selective church-based education.

Ministers had already announced that every secondary school would be rebuilt by 2015. But under existing rules, voluntary-aided schools, which include most church primaries and secondaries, have to contribute 10 per cent of the cost of any building or refurbishment.

The Anglican and Catholic churches had complained to ministers that they would not be able to foot the bill. This week the Department for Education and Skills confirmed that the 10 per cent rule would be waived in a one-off deal to allow faith schools, which educate around 500,000 secondary pupils, to fall into line with the rest of the maintained sector.

Marilyn Mason, education officer for the British Humanist Association, said: “It is outrageous. Faith schools do not have the same admissions and employment arrangements as other schools: if they want to have access to public funds they should surrender these privileges.” Under the 1944 Education Act, churches had to contribute half of all costs for new buildings, although this was eventually cut to 10 per cent.

The decision will benefit 350 RC secondary schools, 130 Anglican schools and 23 run by other Christian churches. Five Jewish schools, two Muslim ones and a Sikh school will also benefit.

Some of the schools will be refurbished, at a cost of as little as Pounds 10,000, while others will get multi-million-pound rebuilds. The final bill will probably top pound;550m, roughly in line with sums earmarked for other state schools.

In return, church schools will lose pound;17m a year from their annual capital allocation over the next decade. But with pound;473m earmarked in 200708 alone, the concession is unlikely to be felt.

Faith schools have been criticised for using their admission criteria to select high-ability pupils. They are popular among parents because they have a reputation for enforcing discipline - and some families have been accused of cheating admissions rules by a sudden conversion to religion.

But Martin Bradshaw, from the Catholic Education Service’s legal team, said: “That is a charge we would deny. We believe this assistance recognises the outstanding contribution made by faith schools and we are extremely pleased.”

The Becket RC secondary school in Wilford, Nottingham, is one of the best-performing schools in the East Midlands, but has spent the last 29 years in temporary accommodation.

Tony Glover, the head, said: “Faith schools add a real richness to the education system and it penalises us hugely to expect us to pay 10 per cent towards the cost of a new building. It is excellent that the DfES have finally realised that this is an unrealistic burden.”

Four years ago the Anglican church accepted proposals in a report by Lord Dearing to raise millions of pounds for 100 extra secondary schools.

Labour has also pledged to rebuild all primary schools if it won a third term, although it has yet to confirm a timetable or funding pot for the work.

* graeme.paton@tes.co.uk