Primary schools in England will receive an extra £750 million for PE and sport between now and 2020, Prime Minister David Cameron announced this morning.

Mr Cameron said the £150 million-a-year premium launched last September as a legacy of the Olympic games would be extended for a further five years.

The premium goes straight to headteachers, who can decide how best to spend it to provide sporting activities for their pupils.

A typical primary school with 250 pupils received £9,250 this year, the equivalent of around two days a week of a primary teacher or sport coach’s time.

Mr Cameron said that quality school sport has benefits throughout the curriculum and beyond.

“It develops confidence and a sense of achievement, it teaches young people how to rise to a challenge, and nurtures the character and skills that will help them get on and succeed in life,” said the prime minister.

“It’s an important part of our long-term plan to deliver the best schools and skills for young people.”

Lord Coe, the Olympic and Paralympic Legacy Ambassador, said that he was delighted by the news.

“We wanted to use London 2012 to inspire a generation to choose sport and ensuring that children get a positive and engaging experience in primary school of physical education, and sport is key to this,” said Lord Coe.

“A long-term commitment to continue this funding can only help to achieve this.”

Mr Cameron also confirmed that from this month, primary schools across England will be able to apply for a share of an £18 million fund to improve outdoor spaces for PE and sporting activities.

The Lottery-funded scheme will be run by Sport England, with priority given to schools with limited outside space and a strong commitment to PE and sport.

The schools are expected to receive an average of £30,000 each to help them improve their provision. 

The prime minister also announced an additional £11 million investment for the School Games.

Yesterday the Youth Sport Trust urged schools to grasp the wider academic and health benefits of PE and sport to help tackle a “crisis of inactivity” among pupils.

Its chair, Baroness Sue Campbell, today welcomed the “incredible commitment” from the government as a “unique opportunity”.

“With this investment we should have absolute confidence that PE in primary schools can be transformed, ensuring physical literacy is embedded,” she said.

“I would strongly recommend that headteachers carefully consider how this funding could best impact on their pupils through a rounded PE, physical activity and wellbeing strategy.  As a first step, I would encourage them to invest in upskilling their teaching workforce.”