The scheme by which private companies pay up-front for public-sector capital work in return for an annual fee has been criticised as poor value for money but a report published last week by the National Audit Office suggested that it has been popular with those involved.

Of the pound;2.2 billion made available for schools building work this year, pound;467 million was in the form of PFI credits and funding for public-private partnerships. It will rise to 27 per cent of the pound;2.8bn capital spending planned for 20023.

Capital cash will rise to pound;3.5bn in 20034, with PFI credits worth pound;850m, 24 per cent of the total.

Education junior minister John Healey supplied the figures in response to a question from Conservative MP Chris Grayling.