They warned that non-statutory areas, such as adult education, the youth service and discretionary awards, were being pared back even further.
A survey by the party reveals that, in more a than quarter of local authorities, the education service has this year been left struggling with no new money.
Don Foster, the party's education and employment spokesman, said that local authorities had been forced to slash services despite ministerial claims that they had been given more money for education.
Although total education spending this year rose to Pounds 774 million, he said, it was still Pounds 236 million short of what authorities had spent in 199596. Any increases in school budgets this year were made possible only by authorities drawing heavily on their reserves and by cutting other education areas and council services.
Mr Foster backed up his claims by quoting from a report from the House of Commons treasury select committee, which had argued that there was little substance to the Government's claims that schools spending had been increased. According to the committee: "The Government's intention that the additional money should be allocated by local authorities to schools is not one which could readily be enforced."
The Lib Dems' survey identifies Buckinghamshire, Hereford and Worcester, Hertfordshire, Northumberland, Powys, Somerset, Surrey, Solihull and the London boroughs of Hammersmith and Fulham, Kingston, Redbridge and Richmond as cutting school budgets. It shows that education budgets in Birmingham have been cut by Pounds 19m since 1995 and by Pounds 9m in North Yorkshire in the same period.
One in five authorities have cut adult education, according to the survey, three out of 10 predict that savings will have to be made to the youth service and nearly three out of five say that discretionary awards will be slashed.
A survey of more than 1,000 schools by The TES last week revealed widespread cuts in school budgets, with headteachers hanging back from making crucial repairs and maintenance in an attempt to keep staff and balance the books.
Six out of 10 heads told The TES that they were spending less on books and equipment, repairs and maintenance and resources for curriculum development.
Despite their best attempts to protect jobs, almost half - 48 per cent - admitted they were spending less on staff.
This week, The TES publishes more results of its survey, including the finding that 88 per cent of headteachers believe that taxes should be raised to provide more money for education (page 4). Six out of 10 say that the Liberal Democrats have the best education policies.