The Conservative party has pledged to increase funding for schools while slashing spending on other public services.

Oliver Letwin, shadow chancellor, announced that the party would cut public spending so that pound;35 billion would be saved annually by 2011. But he said that health and education funding would continue to increase at current levels until 20078.

Mr Letwin - who has claimed he would rather beg than send his children to his nearest state school in Lambeth, south London - said the Conservatives would improve education by increasing private funding and parental choice.

If successful in the general election, expected next year, the party would cut administration costs and bureaucracy in education and other public services to give taxpayers more “bang for the buck”.

“Parents must be given effective power to choose schools for their children,” he said. “And teachers, too, must be given the scope to respond to parent power, unencumbered by the bureaucracy that now impedes them.”

The Conservative plans follow an admission by Gordon Brown, the Chancellor, last month that public spending cannot continue increasing at current levels.

“The rate of spending growth in the next spending round will be lower than in this round,” he said.

Mr Brown will announce the Government’s spending plans for the years to 20078 in the summer.

The Conservatives revealed last year they were planning to give parents a voucher, or “passport”, of more than pound;3,500 per child to buy the education of their choice.

Mr Letwin said the party realised the reforms would increase costs in the early stages and pledged that schools would receive extra funding as compensation.

Tim Yeo and Tim Collins, the shadow education ministers, are developing the mechanics of the “passport” scheme and are expected to reveal further details in the summer.

The Tory plans were attacked by Mr Brown, who said that pound;17.5 billion of the pound;18bn cuts planned for the first two years would come from public services rather than reductions in bureaucracy.

“The proposals are extreme, they are out of touch, they are a return to the old days of the Thatcherite years,” he said.

The Liberal Democrats, who have abandoned plans to put a penny on income tax for education, will publish their spending plans next month. Vince Cable, the Lib Dem treasury spokesman, described the Conservatives’

strategy as “highly implausible” and warned it would lead to rising crime and worsening transport.

The National Union of Teachers said teachers would remain opposed to any form of voucher system.

The Conservatives’ announcement was made on the day a leaked report was published showing the Government plans to cut pound;10 to pound;15bn spending a year for the next three years. Mr Letwin said the Government efficiency review, led by Sir Peter Gershon, suggested the Conservatives shared “a great deal of common ground” with Labour on the issue of cutting bureaucracy.