Schools that dramatically cut truancy could win a pound;10,000 "Truancy Buster" award. The cash comes as part of a new pound;137 million package to tackle unauthorised absences and exclusions.
Writing in today's TES, education minister Jacqui Smith also says extra funds will be provided to increase the number of truancy "sweeps" by police and education welfare officers.
Ms Smith says reasons for absence given to welfare officers have included choosing a hamster, and tongue- piercing.
Of the pound;137m going directly to schools, pound;10m is for the creation of on-site support units for disruptive pupils. Ministers want to see 1,000 support units in schools by 2002. The money will come via the Standards Fund's "social inclusion" element, which is up pound;43m on last year.
In addition, local education authorities will be able to bid for pound;37m to fund schemes to reduce truancy.
Ms Smith says: "Too many children are missing school and cutting their chances in life ... more needs to be done to reduce significantly the 50,000 pupils away from school without permission on any given day."
Action alrady taken by schools includes employing staff to phone parents when pupils are absent.
At Montgomery high in Blackpool, Standards Fund cash pays for a teacher in the school's learning support unit. Local shopkeepers also alert the school when they see suspected truants.
In York, the local education authority has introduced truancy watch schemes that have led to a fall in youth crime.
By 2002, all excluded pupils will be entitled to full-time education. Many will go to off-site pupil-referral units where, over the past three years, the number of places has increased by more than 1,000.
Government figures show secondary pupils skipped an average of nine days of school in 1999-00, while primary pupils missed almost a week.
There is a strong correlation between absenteeism and exam results. At schools with very low absence rates (less than 0.1 per cent of half-days missed) nearly three-quarters of pupils achieved five good (A*-C) GCSE passes. At those with the highest rates (more than 2 per cent of half-days missed), just 28.6 per cent got five good passes.
The Government has set a target of reducing truancy and exclusions by a third.