John Major’s plan to double the number of assisted places and open the scheme to prep schools was given a rousing welcome by the independent sector, but it was greeted with dismay by teacher unions, the opposition parties and the local authority associations.

Christopher Parker, a member of the Headmasters’ Conference working group on assisted places, said the decision, announced by the Prime Minister at last week’s party conference, had come as a “welcome surprise”.

However, Mr Parker, who is also head of Nottingham High School, said he would like to see some of the extra money used to close the gap between the full fees and the assisted fees, which have been capped for four years.

This would reduce the amount of money some member schools put into the scheme - Martin Stephen, high master of Manchester grammar, reckons that his school subsidises the APS by Pounds 100,000 a year, for example.

“We have a scheme which works extremely well, but we want it to work perfectly; there are little sophistications that need to be made,” said Mr Parker.

A recent survey of HMC members showed that a third favoured a voucher-type scheme whereas a third wanted to close the subsidy gap, he said.

The prep schools were happy with the principle of younger children being given assisted places, but Colin Holloway, head of King’s College Junior in Wimbledon which runs the scheme with the senior school, was concerned about selection below the age of 11.

“We need a system of academic profiling so that places would be awarded on good evidence to ensure continuity - it would be wrong not to. This would need a lot of collaboration between schools.” Musical and mathematical talent showed up early and these children might well benefit from specialist prep schools, he added.

Chris Evers, chairman of the Incorporated Association of Preparatory Schools, which has some 500 member schools, said he wanted to know how the scheme could work in schools like his which were not linked to a senior establishment. “In principle, we have no objection. We support the idea.”

Arthur Hearnden, secretary of the independent schools’ joint council, said the expansion of APS offered a “marvellous prospect: there’s a queue of people waiting to join the schools. We’ll be satisfying a demand that’s had to be held back.”

But state-sector leaders were less than euphoric. The Secondary Heads Association’s executive expressed “astonishment and dismay that, at a time when the funding of state education is in crisis,the Prime Minister should even contemplate spending Pounds 100 million to extend the APS for the supposed benefit of a tiny minority of pupils”.

Nigel de Gruchy, general secretary of the National Association of Schoolmasters Union of Women Teachers, asked how the Conservatives could justify extra money for the scheme but not for the smaller classes and basic resources badly needed by state schools?

Doug McAvoy, the National Union of Teachers’ general secretary, said John Major was financing a class-led society.

Shadow education secretary David Blunkett accused the Prime Minister of giving up on raising standards for most children.

The associations representing local education authorities in England and Wales have warned against a further deep division over financing of schools. Educating another 86,000 pupils in 1996-7 will require an extra Pounds 191 million for more teachers, books and equipment, they say.