Primary school rolls are likely to be in decline until 2011, while secondary numbers will not stop falling until 2016. The admission, in the Government's submission to the School Teachers' Review Body, is likely to fuel fears over the number of schools forced to close to stop money being wasted on empty places.
According to the Department for Education and Skills, the primary population in England and Wales will shrink from 4,453,000 in 2003 to a low of 4,119,000 by 2011, a fall of 334,000.
Secondary school numbers in England and Wales are likely to fall from 3,524,000 last year to a low of 3,156,000 by 2016 - down by 368,000.
Falling rolls, caused by declining birthrates nationwide, are already seen as the major factor behind forced school closures.
In the past 20 years 2,258 primary and 1,035 secondary schools have shut.
In recent weeks Hull council has revealed it wants to close 20 of its 77 primary schools to cut surplus places.
In Nottingham up to a quarter of the city's primaries could go to cut 4,000 empty places and Plymouth council wants to shut 10 primary schools by 2014.
But Chris Keates, acting general secretary of the National Association of Schoolmasters and Union of Women Teachers, said further drops should not necessarily result in school closures and called on the Government to cut class sizes.
In 1997, Labour pledged to reduce infant class sizes, but overall primary class sizes have barely fallen. There were 23.4 pupils per primary school class in England and Wales in 1997 compared to 22.7 this year. In secondary schools numbers have increased slightly from 16.7 to 17.
Despite falling rolls, the number of trainee teachers being targeted by the Government is actually on the increase, raising further concerns over teacher surpluses.
The TES reported in August that up to a quarter of primary school trainees had still not found permanent work, with vacancies in some parts of the country attracting 300 applications. But the Teacher Training Agency increased the number of people on primary training courses by 7 per cent this year. Secondary numbers remained the same.
John Howson, visiting professor at Oxford Brookes university, said the increases could be swallowed up in the short-term by the need for more teachers to implement the second phase of the workload agreement, which guarantees more non-contact time for all teachers.